Three weeks ago, Microsoft faced the threat of a dollars 1m a day
fine in the US for allegedly using unfair business tactics and breaking
a 1995 promise not to abuse its monopoly in computer software. The US
Justice Department’s claims have yet to be proven, but there are already
reports that many of Silicon Valley’s leading lights are closing ranks
against the computer software giant.
Bill Gates won the hearts and minds of many in the computer world by
taking on IBM and winning. But his many fans might not take so kindly to
this latest development.
Like other rebel brands formed in the 70s by charismatic entrepreneurs,
Microsoft has become a member of the ’new establishment’ - part of the
monolithic system of big business that it set out to challenge.
Arguably, this is also true of Nike, Virgin and The Body Shop - all
formed around the same time as Microsoft and now well into responsible
These brands are all experiencing image problems, which poses
interesting questions for companies setting out on a similar path.
When being ’new’ and ’anti-establishment’ and therefore ’better’ was the
source of your success, how do you protect yourself when you lose the
newness and have become part of the very establishment you rebelled
against in the first place?
Nike has recently attracted criticism on several fronts, all of which
result from it flexing its corporate muscle too hard.
Articles and programmes critical of the company’s employment practices
in Asian factories have appeared in the US press and on television, and
the Internet has become a hotbed of anti-Nike activism. There is a
’Boycott Nike’ Web site, dedicated to consumer criticism.
One article, in the Wall Street Journal, headlined ’Nike Labor Woes
Leave Image Muddied’, highlighted this quote from an American image
consultant: ’Nike is a dollars 6bn company that sells dollars 140 shoes
made by people earning dollars 1.50 a day - that’s difficult for the
public to reconcile.’
Another article in the New York Times, ’Youthful Foes Go Toe To Toe With
Nike’, concentrated on ’dozens of young people planning to dump their
old Nikes at a Nike store to protest at what they say is the shoe
company’s double exploitation of the poor.’
Earlier this year, Nike attracted further criticism for allegedly
attempting to influence the transfer of Romario, the Brazilian football
star, from Barcelona to Inter Milan. The company has strenuously denied
that it was involved in the negotiations, saying that the fans would
have resented it for doing so. But the rumour and the impression of Nike
as ’control freak’ persists.
Evidence, perhaps, that the company is starting to believe in its own
mythology and is becoming too arrogant. Some observers certainly think
so. US market researcher Hazel Kahan, who does work for IBM, says: ’I
think we are seeing a backlash here against Nike. You have got to
respect the consumer and I think there are signs that Nike is not doing
It is becoming too arrogant.’
Victim of success
Patrick Smith, marketing director of Sampson Tyrrell Enterprise, who
worked on Nike in the mid-80s, says that it could become a victim of its
own success: ’You can soon lose your credibility in the youth market if
your brand has too much exposure. With Nike, it’s got to the point where
you don’t want to see another ’swoosh’.’
A Nike spokesman says such criticism is par for the course when you are
the biggest company in the sector. ’We employ 500,000 people across 31
different countries. Occasionally, you are going to get something
What is important is that you rectify the situation.’
He says Nike has no problem keeping its original proposition fresh.
’Nike is about great products and being passionate about sport. Every
sportsperson wants to improve on their previous performance. We are the
same and we employ people who share the same philosophy.’
In the UK, Virgin - that archetypal anti-establishment brand - will be
looking closely at Nike and Micosoft’s problems. Virgin is different to
Microsoft and Nike in that it does not dominate any one market and can
still play the underdog fighting the establishment across all the
sectors in which it operates.
But according to Creenagh Lodge, chairman of brand consultancy CLK,
Virgin has reached the stage in its life where its honeymoon with
consumers is in danger of ending. ’I think people are beginning to
wonder if Virgin can continue to deliver on so many fronts. It’s only
going to take one or two big failures for serious questions to be
Virgin’s West Coast Line train service, which is beset with reliability
problems, is seen by some as taking the brand into this danger zone.
Such was the state of the line when Virgin took it over from BR that it
has struggled to work its magic and the service is still unpopular. New
rolling stock - and the interim solution of using spare Eurostar trains
- could soothe the wound, but lasting damage to the brand may have
already been done.
Virgin, however, is addressing the issue of keeping its brand values
fresh as it grows and becomes more successful. James Kydd, marketing
director of Virgin Trading, says the company has a decentralised
structure with lots of small units or companies where people are given
more responsibility than they would normally get. ’We work to keep an
atmosphere where people are having fun and generating ideas.’
Kydd admits that arrogance is an issue in any successful
’You have to have it in the front of your mind. It is easy for people to
start thinking that they should have bigger offices, bigger BMWs and so
on. It’s like a disease and we try to protect people from that
It only causes more politics and we think it is better for people to
have greater responsibility.’
Of course, all anti-establishment brands are sitting targets. The
marketing spin they are able to put on their rebellious or
consumer-championing credentials means that they must be prepared to
suffer in the same way when they get it wrong. And the more successful
the company, the bigger the hit will be.
This is a natural human reaction, says Lodge. ’Whenever a crusading
innovator becomes mega-rich, then people get suspicious. Their eyes
narrow, their ears prick up, and they look out for mistakes.’
Equally, the more reliant the rebel brand is on one visionary leader -
whether Bill Gates, Richard Branson or Anita Roddick - the more open to
personal attack it becomes. Gates’s immense wealth might already be
damaging Microsoft’s image and Anita Roddick’s stance on opposing animal
testing has been an open invitation to opponents hoping to find
In September 1994, Jon Entine launched an attack on the company’s
ethical stance in Business Ethics magazine. The article sparked a storm
of controversy and revealed a vulnerable chink in The Body Shop’s
Like any successful brand, anti-establishment ones have to be built on
sustainable values, which must be integral to the company’s
If you start out as a revolutionary then you have to remain one. Merely
serving your audience once you have captured its interest is not
Pam Robertson, director of strategy at Interbrand, says:
’Anti-establishment companies can remain successful provided they keep
moving the brand on and are sensitive to what consumers are
She believes that The Body Shop failed to evolve its brand and paid the
price. ’The ethical positioning was great, but then it started to be
eroded as other organisations adopted similar policies. The company was
too narrowly focused and not thinking enough about where the business
was going next.
It had a one-product idea.’
Robertson argues that one of the toughest markets faced by
anti-establishment companies is the internal audience. ’Staff can become
seriously disaffected if their company does not keep in touch with their
expectations. The result is that the company loses its energy,’she
This might serve as a lesson to New Labour, which sold itself on the
idea of a new, more accountable and caring government but now faces the
danger of not being able to live up to the new, firebrand image both in
the local and the national party. Its anti-sleaze stance has already
been put to the test and some pre-election promises, including banning
all tobacco sponsorship of sport, are beginning to crack.
Bad for one’s image
Provided there is an underlying vision, companies which challenge the
status quo, are rebellious, and promise to serve the consumer better can
be hugely successful. It should not be forgotten that despite their
shortcomings, Microsoft, Nike, Virgin and The Body Shop are meteoric
brands and an inspiration to others.
But if the anti-establishment brand becomes too arrogant and is involved
in anti-competitive behaviour, its image can be fatally undermined.
These companies can only afford a couple of mistakes.
Rebellious companies can trip up by becoming too wrapped up in their own
mythology and believing themselves to be invulnerable. The pride and
courage of the young upstart must not be allowed to turn into arrogance
in later life.
Bill Gates should not forget that someone, somewhere, will be planning
how to do to Microsoft what he did to IBM.