“The brand is defensible” is a phrase increasingly muttered across the consumer landscape. The idea is that the look, feel and meaning of the company and its products have inherent defensibility, giving the company a long-lasting competitive advantage.

The challenge with a statement like this is that “brand” usually lacks a definition, further perpetuating an important misunderstanding: people are mixing up Brand with The Brand. While the two terms are related, they are distinct.

The Brand

The Brand is just the look and feel of a company. For Apple, this is sleek lines, minimalist typefaces and vibrant photography; for Ralph Lauren, it’s dark wood, classic colors and patterns, and family photos.

The Brand is not defensible. Anyone can recreate any of the above with some design tools and a good eye. It’s purely about execution, and digital tools—Photoshop, Squarespace, Shopify—are only making it easier to make The Brand look good.

Brand

Brand, however, is much different and more abstract. People often talk about Apple, Coke, Amazon, Tesla, Ralph Lauren and Gucci as leaders when it comes to Brand. But the definition often lacks precision.

We define Brand as the accumulation of all of a company’s actions to make something meaningful and memorable. Every decision a company makes contributes to its Brand, from its products to its aesthetics, from its hiring to its leadership.

Brand is never frozen in time: it can be powerful today and grow weak tomorrow if a company’s actions start to diminish the resonance and relevance of what the company does. Brand, therefore, is both everything and nothing.

Defensibility

Defensibility and longevity have been big focuses for Loose Threads, most importantly in Building Bulletproof Brands, a three-part series that looked at how the internet has changed the moats for physical goods brands. The basic argument is that brand, product and distribution—the three traditional moats for consumer product companies—are in large part no longer defensible. The only defense that remains is the network of shoppers and admirers, which allows a company to grow with lower customer acquisition costs and build long-lasting connections.

In 1991, Warren Buffett wrote his annual letter to Berkshire Hathaway’s shareholders, where he outlined the difference between a franchise and a business:

  • An economic franchise, according to Buffett, is a company whose product or service 1) is needed or desired; 2) hard to substitute; 3) financially unregulated. A franchise’s underlying foundations are so strong that the company can prosper regardless of mismanagement, which is bound to happen at some point in a company’s existence.
  • A business, on the other hand, is only competitive if its product or service is cheap or scarce. But these two attributes are fickle, according to Buffett. “With superior management, a company may maintain its status as a low-cost operator for a much longer time, but even then unceasingly faces the possibility of competitive attack.” Poor management can ruin a business, while it can only hurt—but not kill—a franchise.

Buffett concludes that most companies fall somewhere in between a business or a franchise, and “can best be described as weak franchises or strong businesses.”

The distinction between The Brand and Brand is foundational to understanding defensibility, and Buffett’s framework proves helpful:

  • The Brand is not defensible because anyone can copy it. It’s simply part of a Business.
  • Brand is the result of good management, but it is not defensible, nor is it frozen in time. Therefore, it is also part of a Business.

So while The Brand and Brand are distinct—and both are valuable—neither are structurally defensible and thus none create Franchises. Next time you’re talking with someone and they mention that a company’s brand is defensible, ask them how they define “brand”—what is included in their definition and what isn’t? You will likely find that many ideas about the power of “brand” have been perpetuated for a long time without much critical thinking. But in a time when complexity and competition lingers at every corner, the future of many companies depends on their ability to be precise.