Hugo
June 5, 2024

Competitive Edge – The Next Big Thing

Author: Georgia-lorene MacEbong

Pizza Hut’s McBurger

Pizza Hut just launched its most surprising product yet: BURGERS! Yes, you read that right. Fast food sales are slowing down, with Starbucks, KFC, and McDonald’s all reporting lower sales figures as the cost of living continues to soar and low-income Americans tighten their budgets.

Pizza Hut’s, answer to the slowdown? The Pizza Hut cheeseburger melt—a parmesan-crusted thin crust melt folded and loaded with beef, bacon, onions, mozzarella, and cheddar. It’s a pizza-styled burger and a bold step out of their comfort zone.

The company rolled out an aggressive advertising strategy for this bold step by sending cars through rival restaurants’ drive-throughs to announce the big news. Picture it: you’re at Burger King, and a Pizza Hut car rolls by with a sign saying, “Want a better burger? Come over to Pizza Hut!” It’s like a fast food diss track.

While this move is certainly an interesting one for the fast food company, it isn’t novel. Over the years, facing more competition, higher prices, and slowing sales, companies have utilized a similar strategy to varying degrees of success. McDonald’s is a great example of a not-so-successful attempt. In the 1980s, they introduced the McPizza. It was a dense, 10-inch pizza with heaps of cheese and toppings and it flopped, disappearing into the archives by 2000.

History is a great teacher so, what can Pizza Hut’s burger learn from the McPizza? The key lesson is that “process can eat the product.” The McPizza’s downfall wasn’t its taste but its slow cooking time, which didn’t fit McDonald’s fast-food model. Customers were annoyed by the wait, and it felt off-brand.

Pizza Hut’s burger, however, sticks to its process using the same ingredients as its pizzas (pizza crust as the burger bun, similar ingredients to a meaty pizza) so this may prove to be a success.  The jury is still out…

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Uber-Cart – Unlikely Allies

In an unusual collaboration, Instacart has announced that it will integrate Uber into its app allowing users to order both groceries and takeout from the same app. It’s an unlikely duo and one many never saw coming but in the face of stiff competition, aka DoorDash, anything is possible!

DoorDash currently dominates 67% of the US food delivery market and the company is expanding rapidly into Instacart’s territory, grocery delivery. By joining forces, Instacart and Uber aim to challenge DoorDash’s supremacy with more drivers, users, and deliveries.

It’s a beneficial alliance– Uber gets more reach, Instacart adds a new service, and DoorDash faces a tougher rival. As consumers demand more of everything, from customization to convenience, it’s ushering in a new era of strategic partnerships in tech where “the enemy of my enemy is my friend”.

It’s a strategy that appears to be working; in May, both Instacart and Uber’s stocks rose, while DoorDash took a hit. The lesson here?  Sometimes, teaming up with a major competitor is the best way to tackle a bigger threat.

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Where Did Neutrogena Go Wrong?

If you’re a skincare enthusiast or just someone who has been to a drug store, Neutrogena is a brand you recognize. Founded 97 years ago in California and acquired by Johnson & Johnson in 1994 for $1 billion, Neutrogena was the go-to skincare brand for many years. If it was good enough for America’s sweetheart, Jennifer Garner, it was good enough for us.

But lately Neutrogena’s market dominance has taken quite a hit. The company reported a 5% drop in sales last quarter, and over the past five years, its market share has fallen by 40% giving way to a new frontrunner, CeraVe. Rumor has it a Neutrogena executive’s daughter even buys CeraVe, despite a cabinet full of Neutrogena.

So, what happened? One could call it a series of unfortunate decisions. Consistently, Neutrogena scaled back at the worst times– they halved their advertising budget, so no more ads with Jennifer Garner. They also slashed their research and development budget, missing the mineral sunscreen trend. Then there was the pandemic’s impact on supply chains which led Neutrogena to cut their product offerings in half.

But their biggest mistake? Forgetting to join TikTok. During the pandemic, while everyone and every brand (including CeraVe) was sharing skincare routines, Neutrogena took the backseat. It took a full year for the brand to join the viral platform but it was too late– Gen Z had already embraced CeraVe.

The lesson here is an oldie but a goodie– the market is like a bullpen: if you leave a void, someone will fill it, and more importantly, there’s always someone waiting to take that top spot. Everywhere Neutrogena pulled back, CeraVe stepped up. Three years ago, Neutrgena lost its title as the most recommended skincare brand by dermatologists – to CeraVe.

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