Outsourcing as Brand Equalizer

A recent post by Grant McCracken on the Harvard Business Review Blog Network (“The Black Swans Circling P&G,” June 21, 2013) claims that “we are watching the death of the big brand” and related consumer preferences and marketing techniques. While this is debatable – and indeed disputed by a number of readers in the post’s comment section – what is not arguable is the rising power of small brands. As McCracken’s post notes, “…small players make all the things that once could only be made at scale: beer, soft drinks, watches, razors, clothing, make-up, laundry detergent. With a webpage as their store front and FedEx as their channel, they can reach consumers anywhere. And, yes, of course, these are tiny operations. But large always starts small.”

While there are many factors driving this trend, outsourcing is certainly one of its key enablers. Outsourcing has leveled the playing field for transforming a product idea into a viable business. From design to prototyping to marketing, from manufacturing to fulfillment and distribution, outsourced service providers are available to cost-effectively provide the same economies of scale that were previously available only to the largest companies. When even such core functions are outsourced, it is no great leap to also outsource corporate support functions such as legal, IT and finance.

In my opinion, it is a bit of a stretch to sound the death knell for big brands – just as it was premature, in hindsight, to think that the ecommerce upstarts would kill off all the brick-and-mortar retailers. But there is no denying that there is more opportunity for small consumer product companies than ever before. David doesn’t have to kill Goliath to have a nice life for himself.