At the beginning of this century, we live in a highly stratified and competitive society, characterized, among other things, by phenomena such as globalization, the development of the information society, and the new competition arising from emerging countries.
All of this, seasoned by the rise of the so-called economic bubble, its burst and the deep crisis of 2008 — with its lingering consequences and transformations still felt today — and the ongoing COVID-19 pandemic. Could there be more?
All these factors are testing the design of strategies to respond to such profound and radical changes. Today, there exists a well-established body of doctrine on the principles that govern the strategic development of companies. It is also true that at each evolutionary stage of the markets, new theories are formulated to provide answers — theories that, as soon as they are proposed, lose their usefulness because they are based on circumstantial or poorly proven facts. This generates confusion and uncertainty, and it seems that what was valid yesterday is no longer so today.
We should reflect on what remains and what truly changes. Strategic principles do not change as much as the constant need to adapt to changing conditions required to remain competitive and achieve success. Success that can be defined as: selling with value, holding a market, and winning the future. In other words, generating profits, satisfying customers, and ensuring the survival of the company.
The phenomenon of globalization is not giving rise to homogeneous global markets, but rather to a global culture that influences the standardization of consumers’ lifestyles, while at the same time each local market maintains its own competitive structure — often very different from others. Opposite the sophisticated consumption of advanced societies stands the emerging consumption of developing countries. By 2030, according to the World Bank, the global population will reach 9 billion people, 90% of whom will live in these new markets.
An essential factor shaping this global culture is the development of the information society, which, through its networks of instant communication, allows the creation of new social bonds among individuals from vastly different environments, developments, and cultures. In contrast to this global culture, strong cultural movements are emerging that reclaim a local identity — of a people, a nation, an ethnicity, or a religion. Once again, we see the tension between the global and the local. In marketing terms, it is vital to understand which needs and ways of satisfying them are the same across different markets, and what changes in each market to meet those same needs with different propositions.
One of the defining traits of today’s strategic approach is the dismantling of the traditional value chain, where the competitive advantage based on Cost Leadership or Differentiation is no longer seen as opposing or mutually exclusive. Productive offshoring, the replacement of the experience curve with network economies of scale, the development of global logistics, and the technological capabilities of emerging countries allow companies to simultaneously access lower production costs and manufacture high-value products.
Consequently, the new value chain anchors itself in the links that generate the competitive essence of today’s companies. Internally: innovation, digitalization, and organizational models. Externally: high segmentation, brand image, and consumer connection. In this new formulation, there are deeper changes in corporate structure and value foundations than in the marketing that guides their competitive development. The need to create differentiated products, regardless of where or by whom they are manufactured, together with a strong positioning and a powerful brand image, remain fundamental.
After much thought, a daring perfumer from Rue Rivoli decided to move to Place Vendôme, just a few doors down from the pretentious “best perfumer in France.” He chose a shop with large windows and placed a carefully designed, highly visible sign that read: “The best perfumer in Paris.” The rest of the competitors saw their reputation sinking further — how could they compete with the best in Paris, who even surpassed the best in France?
Meanwhile, Brochez Saavedra, son of a French mother and Spanish father, born in Faubourg du Temple on the outskirts of Paris in 1772, had from a young age learned the alchemy of perfume in his uncle’s laboratory. Eager to be independent, to fly on his own, and to create his own fragrances — what we would today call an entrepreneur — he rented a shop in the same Place Vendôme, among the establishments of the best perfumers of France and Paris. There he opened his business under a large sign that read: “The best perfumer in this square.”