Profitability isn't the only metric to be used when determining a brand's future value in the marketplace. Being aware of your competitors, investing in design and technology innovation and having a strong brand direction are key to keeping a brand alive. Market diversification must also be considered as a trump card to play in troubling times.
It’s not always clear when a brand should be killed. Profitability isn’t a useful metric. Most corporations generate 80% to 90% of their profits from fewer than 20% of their brands and many promising startups fail to generate a profit for several years. A better litmus test for keeping or killing a brand may be purpose. In his book, “Start with Why,” Simon Sinek says that a sense of purpose should provide direction when deciding a company’s future: “Instead of asking, ‘What should we do to compete?’ the questions must be, ‘Why did we start doing what we’re doing in the first place, and what can we do to bring our cause to life, considering all the technologies and market opportunities available today?’”