Clear positioning makes industrial companies more successful

A recent study by McKinsey & Company on more than 5,300 industrial brands shows that top-positioned companies perform better. Positioning expert Helmut Kosa, CEO of Vienna Growth Consultancy &US, explains why clear brand positioning helps to achieve transformation and growth targets, especially in times of crisis.

Let’s take an industrial product manufacturer as an example. It has been successful with a particular product for years. In the course of advancing digitalization and automation, he is suddenly affected by disruption through new technologies such as 3D printing and aggressive competitors. As a result, he will lose around 20 percent of his previous sales. Since the quality of the previous product can hardly be improved, the manufacturer cannot charge higher prices for it. As a result, he is forced to develop additional products and business areas in order to tap into new markets and generate additional sales in the medium to long term. In doing so, the manufacturer faces several problems: Firstly, that he cannot precisely define the new business areas from his own assessment, although sufficient know-how would be available in the company for this. Secondly, that the customers do not perceive the manufacturer in connection with a different or new business area due to the previous positioning, which is usually purely related to the manufacture of the product.

Corporate positioning as the basis for growth

So why is clear corporate and brand positioning highly relevant, especially in times of crisis and upheaval, even for industrial companies, in order to solve problems such as those mentioned above? To answer this question, I would like to focus on three essential aspects:

A clear positioning of one’s own company and brand(s) helps to clearly differentiate oneself from competitors and to specifically address existing customers and prospects. In doing so, companies like the product manufacturer mentioned at the beginning should ask themselves the following questions: What am I really good at and what are my unique selling points (USP)? What is my essence and what do I stand for? What know-how and what skills do I have to be able to offer certain products and services? Only those who can clearly answer these questions will be able to properly live and convincingly communicate their own positioning both internally and externally.

This precise elaboration and sharpening of one’s own brand positioning also helps industrial companies to further develop themselves and their range of products and services and to seize new opportunities for growth. Companies need to know what they are good at and what they stand for in order to grow from their core. Only then can the next growth steps be approached more convincingly and mastered more effectively. The product manufacturer mentioned in the example could, for example, make strategic decisions for investments in research and development of new products on the basis of its sharpened brand positioning. A strong brand would help it to develop into further business areas, to really stand behind it credibly and to be taken seriously by its customers in relation to other products as well.

The be-all and end-all for the growth of any industrial company is to have the right employees with comprehensive expertise. Those who live their brand identity on a daily basis and communicate it through employer branding will not only be able to retain, promote and develop their staff for longer. It also helps to make the company more attractive to the outside world in the battle for highly sought-after specialists and the best young talent, and to attract new employees.

Study of more than 5,300 industrial brands

The fact that clear corporate and brand positioning serves as the basis for long-term business success and brings many advantages for sustainable growth can also be backed up by figures. A recent study by McKinsey & Company in the USA on more than 5,300 brands of 900 industrial companies in ten industry segments has produced interesting findings that can also be applied to Europe and Austria. For the study published in January 2021, the presence and visibility of these industrial brands (brand visibility) was recorded in industry publications and other media that customers read to find out about products, systems and technologies. In addition, the development of search queries for these brands in the most important online search engines was also included. Among other things, this showed:

The top five percent of the more than 5,300 industrial brands surveyed occupy 95 percent of the visibility and mentions in industry publications and media. As a result, they are able to achieve much greater public exposure, awareness and image than the remaining 95 percent of industrial brands.
The top three industrial brands in each industry segment have an average of 60 percent visibility. The top brand typically has four times the visibility of the third-place competitor.
The top-positioned industrial brands can charge price premiums of five to 10 percent and have a significantly higher return on invested capital (RoIC) than the other companies.
About 60 percent of industrial brands have lost visibility in the last five years. However, 10 percent of the brands studied have increased their visibility by at least 50 percent over the same period.
As public presence and brand visibility builds more trust in industrial companies, making it easier for customers to make decisions about solutions, it also drives company performance and makes the strongest brands among them even more valuable.

Austria’s industry needs to get back on the growth path

The product manufacturer growth problem outlined at the beginning is certainly not an isolated case. Many domestic industrial companies also have a need for change, intensified by the Covid 19 crisis, so that they can put their business models on a future-proof footing. They would be well advised to put their corporate and brand positioning to the test now in order to create the conditions for sustainable growth and to be able to hold their own against national and international competition in the long term.

Published in the New Business Guide “Industry” on 19.11.2021

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