Beyond Aesthetics

Controversy erupted online late last year when Jaguar unveiled a massive rebranding, centred around the launch of a visually-striking concept car that heralds the company's complete shift to EV production. 

While it’s too early to judge the impact of this pivot, experts like ASB professor Joanna Li can provide insight into the connection between distinctive product design and market performance. 

“There is an important question that practitioners and organizational researchers seek to understand, which is whether firms should position themselves to be similar or different from others,” Li says. 

She explains that traditionally there have been two opposing strains of thought in the field: one arguing that being unique provides a competitive advantage, the other countering that firms or products that are too different will be punished because people don’t understand them.  

Li’s research builds on the emergence of a more nuanced approach that considers “optimal distinctiveness” – examining how companies can strategically position themselves to achieve an optimal market position by balancing conformity and differentiation. 

When Li was a PhD student at Indiana University’s Kelley School of Business, she joined a study led by the school’s professors Juan Bu, Eric Zhao and Krista Li that examined optimal distinctiveness at two levels. 

Focusing on the automobile industry, and specifically on frontal exterior design, the researchers analyzed a data set for 2,203 cars sold in the U.S market between 2001 and 2016. 

The researchers used this information to compare the impact of between-organization distinctiveness (i.e. differences between car brands) and within-organization distinctiveness (i.e. differences between models of cars within the same brand) on overall sales. 

Their findings, published in a 2022 paper for the Strategic Management Journal, highlight the need for managers to consider these different frames of reference when designing products. 

“When we compared between companies, we found that sales are higher when the between-firm difference is higher because the car is more recognizable,” she says. “But within the same company, we found that the more similar the car model is to their standard, the better.” 

Furthermore, they found that the impacts of within- and between-organization distinctiveness of product design on performance are not independent but interactive. For example, since an organization with high between-organization distinctiveness is considered “unconventional,” this allows distinctiveness of product design within the organization to be accepted as consistent with this identity. 

Taken together, this study extends optimal distinctiveness research by studying how it may be achieved when considering both the product (within organizations) and organizational (between organizations) levels.

This knowledge can serve as an incredibly useful guide for organizations to ensure their product designs achieve the optimal performance.

Li also points out that, while their study was based on the automobile industry, their findings can readily extend to other areas as well – in particular, to large companies trying to decide how to leverage multiple products or brands for the best results.