Brand Relevance: Making Competitors Irrelevant - always yours

218 BRAND RELEVANCE
Home Depot, founded in 1978, has been successful as a
home improvement outlet with broad selection and a well -
trained staff of dedicated do - it - yourselfers. In 1991 they decided
to capture the upscale home decoration market with a chain of
EXPO Design Centers. There was little synergy, given that the
new venture involved a different market, products set of capabilities,
and brand. After struggling for nearly twenty years, they
shut it down in 2009. It took an economic downturn to force
the tough decision.
A lack of fi t does make success less likely, but it also makes
success valuable because the fi rm could end up stronger and in
the possession of new capabilities and a broader brand and customer
base. Virgin ’ s success in airlines when it was a pop record
company, with its distinctive strategy and personality, created a
host of strategic options for it.
Will the Firm Support the Effort?
For a new offering to succeed, the fi rm needs to commit and
provide the resources, risk tolerance, and guidance to support
the effort. This requires will as well as resources, especially when
there are bumps in the road that require some innovation. Some
fi rms have deep pockets but short arms — when the going gets
tough the resources disappear. There can be a fi ne line between
making a rational assessment that a concept is not going to be
successful enough to merit ongoing investment and the tendency
to pull the plug at the fi rst sign of diffi culty.
A fi rm ’ s commitment will depend on the availability of
investment resources, the competing alternatives within the
fi rm, the political power of those wanting to access the resources,
and the process used to allocate the resources. Chapter Eleven
will discuss the need to have an objective, fi rm - wide allocation
process that will identify which initiatives and business units
should be funded and defunded and will neutralize the economic
and political power of large business units.