Tag monopoly

The Secret Owners Behind Rival Brands

drstaceynaito Leave a comment
© rawpixel, 123RF Free Images

Most consumers assume that competing brands are locked in a battle for their business. In reality, many of those “competitors” are owned by the same parent company—or rely on the same manufacturers, supply chains, and distribution networks. A shopper choosing between two rival brands, or finding a discounted version of a premium product at stores like The TJX Companies’s T.J. Maxx or Marshalls, may be participating in a strategy designed to capture every type of customer, from luxury buyers to bargain hunters. By owning multiple brands, operating discount channels, or supplying both premium and budget versions of the same product, large corporations can profit from nearly every purchasing decision consumers make—regardless of which option they choose.

Here are a few different business strategies that create the appearance of competition while allowing a parent company to capture customers at multiple price points.

1. One company owns multiple competing brands

A company may own several brands that target different customer segments, even though the products are very similar.

Examples:

  • Procter & Gamble owns brands such as Tide and Gain.
  • PepsiCo owns both Pepsi and Mountain Dew.
  • Volkswagen Group owns Volkswagen, Audi, Porsche, and Lamborghini.

The idea is simple: if a customer doesn’t buy the premium version, the company would rather sell them the budget version than lose them to a competitor.

2. “Fighting brands” (same company, cheaper alternative)

Companies often launch lower-priced brands specifically to prevent customers from switching to competitors.

Examples:

  • Marriott International operates luxury hotels like The Ritz-Carlton while also running budget-friendly brands such as Fairfield by Marriott.
  • Toyota Motor Corporation sells mainstream vehicles under Toyota and luxury vehicles under Lexus.

Different branding lets the company capture both value-conscious and premium buyers.

3. The TJ Maxx / Ross / Marshalls model

This is slightly different.

The TJX Companies owns:

  • T.J. Maxx
  • Marshalls
  • HomeGoods
  • Sierra

Many shoppers think of T.J. Maxx and Marshalls as competitors, but they are owned by the same parent company.

What’s interesting is that TJX often buys excess inventory, canceled orders, overruns, or end-of-season merchandise from manufacturers. Sometimes the item sold at T.J. Maxx is literally the same product that was sold in a department store at a higher price.

However, TJX usually does not own the original brands. Instead, it acts as a discount distribution channel.

4. The outlet-store strategy

Many brands manufacture products specifically for outlets.

For example, a consumer may think they’re buying last season’s premium item at an outlet, but in some cases the product was designed and manufactured specifically for outlet stores at a lower cost.

Examples include outlet channels operated by companies such as:

  • Gap Inc.
  • Coach
  • J.Crew Group

The products can look nearly identical to mainline products but use cheaper materials, simplified construction, or different specifications.

5. Private-label manufacturing (“same factory, different label”)

Sometimes the exact same manufacturer produces both the premium and budget versions.

Examples:

  • A national grocery brand and a store brand may come from the same factory.
  • A premium electronics accessory and a discount-store version may share components or production lines.
  • Prescription and generic drugs are often chemically identical despite large price differences.

In these situations, the company isn’t necessarily “owning the competition,” but it is supplying multiple brands that compete on the shelf.

Why companies do this

The goal is called market segmentation:

Customer typeProduct offered
Premium buyerHigh-end brand
Mainstream buyerMid-tier brand
Budget buyerDiscount brand
Bargain hunterOutlet/off-price channel

Instead of fighting for one customer profile, a large company tries to occupy multiple positions in the market. Whether a shopper spends $20 or $200, the company still gets the sale.

TJ Maxx is a great example because it sits at the end of that chain: it often sells merchandise from premium brands at discount prices, while its parent company, TJX, also owns multiple off-price chains that appear to compete with one another.

The Men Who Built America – Financial Titans

drstaceynaito Leave a comment

When I was a child, American history was taught in a very static manner.  We were expected to memorize important dates and factoids, to the point where epic points in history like the Industrial Revolution, though pivotal and vital to the development of America, seemed dull and uninteresting.  It took imaginative historical books which I have read over recent years, and shows such as “The Men Who Built America”, for a keen interest in American history to ignite within me.

Most recently, I stumbled upon “The Men Who Built America” right around Halloween when I was searching on Amazon Prime Video for an entertaining show to watch. What caught my eye was the fact that the television series was described on IMDB as a miniseries which “shines a spotlight on the influential builders, dreamers and believers whose feats transformed the United States, a nation decaying from the inside after the Civil War, into the greatest economic and technological superpower the world had ever seen. The Men Who Built America is the story of a nation at the crossroads and of the people who catapulted it to prosperity.”  Those words were enough to draw me in.

The focus of this series centers around the lives of Cornelius Vanderbilt, John D. Rockefeller, Andrew Carnegie, J. P. Morgan, and Henry Ford.

Check out these descriptions of the episodes:

1 “A New War Begins” Ruán Magan David C. White, Keith Palmer October 16, 2012
Cornelius Vanderbilt grows from a steamboat entrepreneur to the head of a railroad empire, and gets into a heated rivalry with James Fisk and Jay Gould; the up and coming John D. Rockefeller founds Standard Oil. Many business owners lay their own rail lines which leads to the Panic of 1873. Later, Rockefeller starts to expand his wealth by diverting his business from the railroads to a new innovation, oil pipelines.
2 “Bloody Battles” Patrick Reams David C. White, Keith Palmer October 23, 2012
Andrew Carnegie builds an empire around steel, but finds himself struggling to save face after the ruthless tactics of his business partner, Henry Clay Frick, result in both the Johnstown Flood as well as the bloody 1892 strike at the Homestead Steel Works.
3 “Changing the Game” Patrick Reams David C. White, Patrick Reams, Keith Palmer October 30, 2012
J. P. Morgan proceeds to banish the dark with the direct current electric light of Thomas Edison, but the two soon face serious competition from the alternating current of George Westinghouse and Nikola Tesla. As the 19th century comes to a close, the titans of industry must try to work together to stop a new threat in budding politician William Jennings Bryan, who threatens to dissolve monopolies in America.
4 “When One Ends, Another Begins” Patrick Reams David C. White, Keith Palmer November 11, 2012
Rockefeller, Carnegie and Morgan team up to help elect William McKinley to the U.S. presidency by paying for his 1896 campaign, to avoid a possible attack on monopolies. However, fate intervenes when McKinley is suddenly assassinated, and Vice President Theodore Roosevelt assumes the presidency and promptly begins dissolving monopolies and trusts in America. Meanwhile, Morgan buys out Carnegie Steel to make Carnegie the richest man in the world, and Henry Ford designs an affordable automobile with his Model T and starts his own business, Ford Motor Company, which sets a new business model for companies to follow.

It was mostly my interest in finance which locked me into this series, but I also truly enjoyed learning about the historical impact which these great men had on a sophomore nation.  If you’re looking for a great series which is relatively short (you could binge watch this over a weekend), then this is for you.