The days of being a pure FMCG, automotive, sports, fashion or (insert category here) brand are over. It is of little use to think in terms of the initial product or service an organisation was set up to provide.
Take Google; is it search engine, automotive manufacturer, telecoms provider, or something else? Or Amazon, which went from bookseller to media company and grocer. It also works for more traditionally non-digital brands, with financial institutions facilitating cycle hire and supermarkets diverging into banking. Extreme diversification used to be quite rare, but is now becoming mainstream and, arguably, vital for longevity and relevance.
Rik Moore, head of creative strategy at agency Havas Media, says that knowing when to diversify is a matter of life cycle. "If you’re starting out, focus on doing one thing well," he advises. "But as soon as you get traction, start to think about how you’d evolve and diversify. If your brand has already reached a level of maturity, diversification and evolution should keep you awake at night."
Moore cites an ex-client in the service industry which asked its staff to invent competitor models that might bring it to its knees. "It’s that kind of thinking, that looks at relatable issues that were answered in different categories, or seeks to break the accepted rules within a business, that can deliver real change."
One category being hit hard by competitors it didn’t see coming is automotive. This is, perhaps, why Volvo employs a futurologist. It’s Aric Dromi’s job to predict the next disruptive force so that the brand can diversify and remain relevant. "Uber didn’t exist five years ago and it’s now valued at more than American Airlines," he says.
"Software and mobility are the threats to the car industry. Cognitive intelligence of machines, 3D printing and urbanisation are massive threats. What scares me the most, is what we don’t know that we don’t know. The things that can pop up at any time."