Case study: The launch of Orange in the UK The story of Orange tells one of the most exciting corporate brand-building successes in recent years with the company's market value having gone from nothing in 1994 to 28 billion ($46.6 billion, (39.7 billion o) in the year 2000. Apart from great deal making, shrewd distribution building, service innovations and technological development, the lion's share of this achievement can be attributed to the power of the Orange brand and its communications that enabled the company to achieve the corporate objectives that it had set at its launch. The enormity of the task facing Orange at its launch is perhaps difficult to grasp and appreciate today, given the current popularity of mobile phones. In 1994, the UK mobile phone market was a confusing place for customers. Digital networks had just been introduced, but few people yet understood the benefits. On top of this, Orange also faced an uphill task in differentiating itself in this market as the last entrant in a field of four. Cellnet and Vodafone, two of its competitors, already had ten years of market dominance at that time, with full national coverage for their mobile phones and millions of captive subscribers on their analogue networks. Both Cellnet and Vodafone had also successfully developed low-user tariffs as part of a pre-emptive strategy to block entry into the consumer market and had assiduously strengthened their dominance of the business market through the development of their digital (GSM) networks. Orange faced a daunting task in 1994 to reach the ambitious corporate objective that it had set 'to become the first choice in mobile communications'. Before the Orange name was launched in 1994, the company's trading name was Microtel; and executives of Hutchison group, Microtel's parent corporation, met at that time to discuss strategies for overcoming, or minimizing, the huge disadvantage of being last in the market. They soon realized that communications would be an integral part of this and instrumental for achieving the ambitious aim of market leadership. In May 1993 a team of senior managers and communications specialists from Microtel, corporate identity specialist Wolff Olins and advertising agency WCRS was set up and charged with developing a clear and strong communications strategy and positioning. This team quickly realized the new brand could benefits, as this would have pitched the brand directly against one of Cellnet and Vodafone's greatest strengths, namely exceptionally low entry costs. Instead, there was room to develop a fully rounded brand identity built upon the market high ground, which had been left conspicuously unoccupied by the competition and would be a better alternative for capturing market share. The team brainstormed names and propositions and finally arrived at the word Orange as best representing their ideas, with its connotations of hope, fun and freedom. Market research indicated that people found the name Orange distinctive and friendly, extrovert, modern and powerful. The name Orange, along with the term 'wirefree' (as one of the communicable values), were subsequently registered as trademarks. Advertising and corporate identity followed and were based around the positioning for Orange as formulated by the team: There will come a time when all people will have their own personal number that goes with them wherever they are so that there are no barriers to communication; a wire-free future in which you call people, not places, and where everyone will benefit from the advances of technology. The Future is Bright. The Future is Orange'. The team also be built around a low cost strategy, emphasizing price realized that given the doubts that surrounded Orange as a late entrant at its launch, the most important task for the media strategy was to imbue the brand with as much confidence as possible. A multimedia schedule was therefore adopted: a dominating presence for the Orange brand with posters heralding each new campaign theme, TV communicating core brand benefits and press providing detailed messages in the information-led environment of newspapers. Since its launch, the branding and communications strategy chosen has delivered on its corporate targets. Although Orange has not become the market leader in the UK, a position still firmly in the hands of Vodafone, it quickly gained market share and a market capitalization that enabled it to expand into other international markets. In 1996, hardly two years after its launch, Orange Plc underwent its first public offering with the shares being listed on the London and Nasdaq markets on 2 April 1996. With became the youngest company to enter the FTSE-100. In October 1999, Orange was acquired by Mannesmann AG, which itself was bought in February 2000 by Vodafone, a deal approved by the European Commission subject to an undertaking from Vodafone to divest Orange Plc. In August 2000, France Tlcom acquired Orange Plc from Vodafone. Despite the changes in ownership, Orange has continued to concentrate on its brand-led communications strategy, rather than on hard-hitting competitive strategies including price cuts and distribution growths, as this strategy has propelled the company to the corporate success and position that it now enjoys. valuation of 2.4 billion, Orange Plc Questions for reflection 1. What does the launch of Orange tell you about the link between corporate strategy and communications strategy? 2. Is communications strategy therefore vital to the achievement of corporate objectives for every kind of organization (in other business sectors)?