The megabrand strategy and the bet on Tsubaki (2006)

The sharpness and the danger of a strategy of concentration

The significance of this decision lay in taking a step beyond the 2001 consolidation. If the decision to pare back a lineup that had swollen to about a hundred brands was a turn from “increase” to “reduce,” the heavy investment in Tsubaki can be seen as a bolder execution still: having narrowed, to bet on a single point. The audacity of pouring more than $43M (¥5bn) of advertising into one shampoo was also a clear break with a Shiseido that had spread its resources thin and wide. The switch from a mindset of competing on numbers to one of gathering behind a brand that can win and raising it was borne out by the first year’s results.

That said, concentration has its underside. Massing advertising on a single point swept the market in the short term, but within about a year of launch price erosion spread at the storefront, leaving open the question of how durable a brand that leans on buzz can be. The efficiency that concentration on a few delivers holds only so long as those few keep hitting. When one considers the path by which the later Shiseido intensified its concentration on the high-price band and the Chinese market and, in time, came face to face with the fragility that concentration brings, the success of Tsubaki can also be seen as having reflected, at once, both the sharpness and the danger of a strategy of concentration.