brand loyalty
Preference of consumers for the products of established companies.

BRAND LOYALTY Brand loyalty exists when consumers have a preference for the products of established companies. A company can create brand loyalty through continuous advertising of its brand-name products and company name, patent protection of products, product innovation achieved through company research and development programs, an emphasis on high product quality, and good after-sales service.
Significant brand loyalty makes it difficult for new entrants to take market share away from established companies. Thus, it reduces the threat of entry by potential competitors, since they may see the task of breaking down well-established customer preferences as too costly. In the market for colas, for example, consumers have a strong preference for the products of Coca-Cola and PepsiCo, which makes it difficult for other enterprises to enter this market. (Despite this, the Cott Corporation has succeeded in entering the soft drink market—see the next Strategy in Action.)

Unfortunately, growth company leaders are often blinded-sided by this predictable speed bump. Once the reality of the S-curve becomes apparent, it may be too late to design the next growth strategy.

The time to innovate—the innovation window—is when the first growth curve hits an inflection point. How do you know when you’re hitting the inflection point? You never know. So the best companies are forever paranoid and make innovation a continuous process.

Steve Jobs understood this when he returned to Apple. In 2002, he challenged his company to break out of the mature computer industry where Apple had never garnered much more than 10 percent market share. He told Time Magazine in 2002, “I would rather compete with Sony than ... Microsoft.”

Eight years later, after introducing the iPod, iPhone, iPad,