Opting Against Creating Your Own Competitor

Brands usually create a fighter brand when trying to blunt a frontal assault from a competitor. In the case of Kind, though, management decided against creating a private label version of its successful bars when Starbucks, one of its largest customer, asked. Kind founder and CEO Daniel Lubetzky provides the money rationale:

We couldn’t see ourselves running two businesses. If you’re training a team to obsess over quality, do you blow the whistle and say: Now we’re going to run a shift where we’re going to focus on cutting costs? If you’re in a volume-driven business, it’s probably OK. But if you’re building a brand and an experience, it’s incompatible.

In other words, Lubetzky acknowledges that the possible private label would require management not only to adopt a different orientation but also, in a sense, require an organizational competency that Kind does not possess. Some companies do not follow Kind's approach. For example, when Walmart asked, Coca-Cola chose to develop and stock Diet Coke with Splenda. By making this choice, Coca-Cola maintained its relationship with the largest American grocery chain while limiting competitors' shelf space. For Kind, though, management took a different approach to the relationship with Starbucks. Despite representing three percent of Kind's revenue, the relationship was not worth the company's allocation of resource. No Room in the Brand Portfolio for a Private Label