Creative Destruction and Small Brands

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Many of our favorite iconic brands all started from someone's intuition about potential needs in a market. This creation process is rarely deductive, where a theory is cooked up in some corporate R&D lab. But many times, genuine innovation happens inductively, where a novel idea just pops into someone's head based on empirical experience and data (Rumelt, 2022).

New and innovative brands are the growth engine that disrupts and propels many industries forward. Therefore, as much as the big players in the grocery industry continue their research and development efforts, they are continually disrupted by some small brand that came out of nowhere (Christensen, 2013). Along these same lines, Schumpeter (1939) calls this phenomenon creative destruction, and it almost behaves like a natural law, where new and better products and services destroy the legacy market leaders. For example, Lijnse (2024) notes the hubris and rigidity of Blockbuster, Sears, and Polaroid in their inevitable downfalls.

The fact is that established brands are distracted with quarterly earnings, investors, existing channel partners, and maintaining market leadership. Interestingly enough, many big CPG companies call packaging changes, flavor variants, or co-branding partnerships as "innovation," even though the base product remains unchanged. As much as they attempt to stay nimble and creative, the commercial end of the business always seems to crowd out the opportunities for genuine innovation.

This is great news for small, nascent brands. The ideation and creation process are not formulaic, or correlated with company size, so that puts your new brand on equal footing in the eyes of the consumer. However, you still need the discipline and rigor in analyzing the market to ensure you can stay viable and grow. The ultimate goal is brand loyalty, but in the beginning, it is about judicious use of promotional support to get placement, trial, and repeat. AnalyzeBrand.com can help you understand your brand's current performance and help you interpret the signal instead of being buried in all of the noise!

Let's discuss!

JimSwallow@AnalyzeBrand.com

References:

Christensen, C. (2013). The innovator's dilemma: when new technologies cause great firms to fail. Harvard Business Review Press.

Lijense, P. (2024) The agility gap: How sears, blockbuster, and polaroid fell behind by ignoring collaboration, Trends, and Their Audience. Leadthepackconsulting.com. https://blog.leadthepackconsulting.com/the-agility-gap-how-sears-blockbuster-and-polaroid-fell-behind-by-ignoring-collaboration-trends-and-their-audience/

Rumelt, R. (2022). The crux: How leaders become strategists. Profile Books.

Schumpeter, J. (1939). Business cycles: a theoretical, historical, and statistical analysis of the capitalist process. McGraw-Hill.