Your Brand Is Not Your Competitive Advantage.

There’s a particular phrase that always makes me grimace in a strategy workshop:

“Our competitive advantage is our brand.”

This conflation of brand building and setting strategy is especially rampant in the tech-startup world, where the pursuit of brand awareness and top-line growth often takes precedence over genuine value creation for shareholders and customers alike. It appears often in student assignments also and has become popularised by armies of branding and marketing consultants with only a narrow understanding of business. I am deeply concerned by the entrenchment of this lazy logic in our Boardrooms and classrooms.

Let me be clear: I’m not anti-brand. I like brands. I buy brands. I even help clients build better brands. But we should not confuse building a strong brand as the same thing as developing a winning strategy. Brand may (or may not) be an element of a strategy, it can be an asset, it can carry value, but it’s not the strategy. A brand is a signal, a story, a wrapper. And it’s only ever as strong as what’s inside.

Here are my views on why the “brand = competitive advantage” logic falls apart faster than a pair of shoes from Shein.

1. A Brand Doesn’t Create Value, It Communicates It

Fundamentally, a brand is a communication device. It tells the outside world what to expect from the inside of the business, thus lowering the risks and transaction costs for a customer to acquire a product. A brand says: “You can trust this. It’s familiar. You won’t regret it.” That’s valuable, but only if the underlying product delivers on the value promise.

Think of the brand as the wrapping paper. Nice to have and it might even drive initial attention; but if the box is empty or the contents broken, people will remember and be upset.

In the end, the brand communicates potential value. It doesn’t create value. That job still falls to things like product quality, customer service, and boring old profitability.

2. A Brand Alone Does Not Create Advantage

Some argue that a brand meets the VRIN test (valuable, rare, inimitable, and non-substitutable) and therefore contributes to competitive advantage.

However. You can have a valuable brand and still be in a weak strategic position, for instance if your costs are too high, your operations inefficient, or competitors move quickly to leapfrog your offering. What actually drives advantage isn’t the brand itself, but the capabilities and activities behind it: product innovation, brand management, customer insight, distribution, service, pricing. This activity system (as Michael Porter and colleagues put it) is what makes a brand both valuable and hard to copy.

Take Nike. It has one of the world’s most recognisable brands. But that brand stands on decades of supply chain mastery, athlete partnerships, R&D, retail excellence, and global marketing. The swoosh means something because of what the business does and not the other way around.

So your brand can be a strategic, valuable asset. But assets don’t win markets. Capabilities and market positions do.

3. There Are Great Businesses with Forgettable Brands

If you take a walk through any supermarket you’ll find dozens of generic products: store-brand butter, unbranded juice, white-labelled shampoo. No branding agency touched these and, yet, they sell in vast volumes with solid margins.

Your local pharmacy is no different. Rows of white boxes from firms you’ve never heard of. Many of them excellent businesses with great fundamentals that you'd be glad to own shares in.

Or look at B2B industrial giants: Foxconn makes your iPhone. ArcelorMittal makes the steel in your car. TSMC makes the chips in your phone. No consumer-facing brand to speak of and yet they’re among the most valuable companies in the world. These firms win on scale, cost leadership, technological sophistication, or supply chain dominance and not brand.

4. Strong Brands Can Destroy Value, Too

A strong brand can lead to more value destruction than a weak one.

Volkswagen had one of the most respected automotive brands in the world. Then came the emissions scandal, which saw its share price down 40% followed by many years of litigation and lost trust.

In healthcare, Theranos is a cautionary tale of brand over substance. Glossy branding, big promises, high-profile board members – but no viable product. The buzz around the brand didn’t save it. In fact, I would suggest that it amplified the scale of the fallout. The stronger the brand, the bigger the fallout when things go wrong.

5. Brand Without Strong Fundamentals Is Just Expensive Storytelling

There’s a circular logic that turns up far too often:

• Q: Why is the company successful?

• A: Because it has a strong brand.

• Q: How do we know the brand is strong?

• A: Because the company is successful.

In truth, there are plenty of companies with impressive branding and terrible fundamentals. Peloton had beautiful branding and brand positioning. But it also had a shaky business model, supply chain issues, and a habit of burning cash faster than its customers burned calories.

Oatly, the alt-milk darling, is another case in point. Its much-vaunted IPO was a major flop with the share price crashing by some 95%. Why? Despite successful top-line growth, the business simply cannot translate that into profit or cash and investors soon realised this.

You can’t brand your way out of poor unit economics. No matter how nice the font is.

The Apple in the Room

At this point, someone will raise their hand and say,

“But what about Apple? Surely that’s proof brands create value!”

Absolutely. But Apple isn’t just a brand. It’s one of the most valuable companies in the world because of world-class design, manufacturing, focused R&D, smart pricing, and an ecosystem that raises switching costs (what we call “lock-in”). The brand is the expression of many smart strategic choices, and is sustained by an elaborate whole architecture. It’s not the cause, it’s the consequence.

Final Thoughts from the Savannah

Competitive advantage comes from doing something better than others – cheaper, faster, smarter, more desirable – and doing it in a way that competitors either cannot or do not want to replicate. It means adding real value to both customers and to shareholders. A strong brand may amplify that advantage: by increasing trust, reducing friction, or supporting premium pricing. But it can’t substitute for it.

If your strategy is to “build a brand,” ask yourself:

• What is the brand standing on?

• What specific problem does the business solve better than alternatives?

• What engine powers growth, margins, and defensibility?

If you can’t answer those questions, then the brand is a façade. One bad quarter, one PR crisis, or one smarter competitor may bring it all down.

Out here, in the wilds of real business, the strongest survive not because they’re loud or pretty, but because they create real value. They know their terrain. They pick their battles. They build trust and strong businesses and not just logos. The next time someone argues that a brand is a competitive advantage, let’s go deeper and unpack what actually makes those businesses win.