There has been an ongoing debate in strategy circles about whether good strategies are designed from the top down or the bottom up. Do great products and business models like that associated with the iPod exist because of great foresight, or did market forces create a need that some product was going to fill in an iPod like fashion? The top down bottom up question can be answered” yes” and “yes”…and it became a part of an IP strategy discussion on branding.

We had a fun discussion at Think IP Strategy while talking about what the threshold is whereupon someone could consider a design or logo infringed. For example, McDonalds has its familiar golden arches, yellow against a red background. Driving around the country, I have seen many fast food places that have also adopted red and yellow in their signage given that the two colours alone, to a driver on the highway, can lead the hungry mind to think of fast food. The question always is how close to the appearance, shape, lettering, and colour is too close, and how prevalent does that mimicry need to be before it truly harms the original brand like McDonalds? Could a few mimics even help McDonalds if bad experiences from them drive people to be more selective about preferring McDonalds most of the time? So we had the exchange below:

Robert: I always like to look for natural examples of strategic problems. So the question, if the Viceroy butterfly mimics the Monarch butterfly because the Monarch tastes bad, and only the Viceroy benefits from this because birds don’t eat it either, what percentage of the combined population can be Viceroys before it materially damages the Monarch brand because naïve birds taste Viceroy’s, find they’re pretty good to eat, and then start taste testing Monarchs also?

Duncan: …this is really interesting. To continue this fun discussion – and maybe you should do a blog post asking some of these thoughts – here are some ways that make this natural example really different to the commercial one:
1. The Viceroy didn’t ‘choose’ to mimic – natural selection pushed it that way
2. The Monarch has no power to stop the Viceroy from mimicking
3. There is no arbiter that pushes the Viceroy to stop on request from the Monarch, or ‘for the public good’

Robert: Since butterflies are a part of our conversation here, which brings to mind the “Butterfly Effect” I’m going to throw a little Chaos Theory into the mix and see how this all might look from with an emergent strategy lens when we observe it. From this lens, to warm up with a well-known example, you would see the dominance of a company like Microsoft in operating systems as existing not because Gates was brilliant and thought up the strategy, but because a place emerged in the market for an operating system standard the Gates was in the right position and smart enough to exploit. WARNING – This is going to go pretty esoteric!!!

1. The Viceroy didn’t ‘choose’ to mimic – natural selection pushed it that way: True. If you see strategies as emergent, however, then you would expect a business natural selection to be taking place that leaves open space to profit from a certain number of mimic brands. Someone will decide to fill that empty space if the IP laws and enforcement standards make the benefits of filling it worth the risk. If mimics exist in the market, it’s evidence that the IP laws of the land make brand or design mimicry worth it to the mimickers as long as the mimic does not damage the real brand too much to diminish the benefit of the mimicry.
2. The Monarch has no power to stop the Viceroy from mimicking: With deliberation, no…still trying to find a court that enforces the laws of Mother Nature. Genetically, the Monarch does have the power to stop the Viceroy from mimicking as an emergent strategy, if we consider natural selection as making the decision. This could happen if the Viceroy numbers made it less safe to be a Monarch as is, and then evolution would look for a better Monarch. So the question, do brands and designs also tweak their strategies at some point to respond to mimicry? … And regards mimics or outright pirates, how do the mimics and pirates manage their businesses in order to become successful but not so successful that they destroy their reason for success, i.e. the successful mimicking? Also, is it better to be mimicked by an otherwise traditional business rather than pirated since pirates may not have long-term survival in mind and so may be less prone to limit the damage they cause as a part of their own self-interest?
3. There is no arbiter that pushes the Viceroy to stop on request from the Monarch, or ‘for the public good’: The arbiter in emergent strategy here is the force of evolution being that if the Viceroy reaches a certain threshold of numbers, it will become bad for both the Viceroys and the Monarchs. The Viceroy’s strategy will stop working, and its “business model” will collapse. This could bring up an odd way to consider such a problem for an IP strategist. Does your “Monarch” brand need to build into its business plan a certain amount of “Viceroys?” If so, wouldn’t it be interesting if a business decided to fill that Viceroy niche with its own mimics, since in its absence, a mimic owned by an outside entity would likely emerge anyway, especially if the success of the original “Monarch” product and the state of local IP laws make the benefits of mimicry worth the risks?

Image credit: dave and rose