Is DSM’s positioning lacking an X-factor, making a split inevitable?

Is DSM’s positioning lacking an X-factor, making a split inevitable?

DSM, one of the Netherlands’ finest conglomerates, would be wise to consider splitting its main business sectors, according to an extensive article in the financial daily of Tuesday, February 10, 2015. The cross-pollination, which DSM itself calls the ‘x-factor,’ between the nutrition and materials divisions, has not yielded significant results so far. Either there isn’t enough evidence of it, or people simply don’t understand it. Some analysts believe that these seemingly unrelated activities could be more successful as independent business units, possibly even leading to higher stock price targets. We believe that a stronger positioning of the entire organization could have prevented this turmoil. Since we specialize in the positioning of B2B companies, we’d like to take you through the positioning of DSM.

DSM is currently focusing entirely on ‘sustainability.’ They do this with the slogan ‘Bright Science, Brighter Living.’ According to Global Brand Director Jos van Haastrecht, this recent focus on sustainability is not greenwashing; employees genuinely believe that DSM can make a difference in sustainability. DSM sees this contribution to society primarily coming from what is referred to as the x-factor: the innovations made possible by the cross-pollination of the nutrition and performance materials divisions. So, the circle seems complete. But if you were to ask people randomly which brands they associate with sustainability, we don’t believe DSM would be in the top 10. However, successful sustainability positioning can be observed, for example, with Dutch brands like Unilever or Triodos.

The website where van Haastrecht’s statement was found has unfortunately been removed, but we include this information for context.

New DSM Brand Promise

“We want to use science in a smart way to improve the quality of life for people now and in the future.”

How sustainable is DSM’s new positioning?

We have serious doubts about the chosen positioning, which, if we read between the lines of van Haastrecht’s story, seems to be implemented top-down. How much affinity does an engineer or polymer specialist who has been working at DSM for 20 years have for this positioning? Is this positioning actually implementable at all levels? A positioning should feel like a ‘warm blanket’ and not just be applicable at the headquarters but also at every brand, product, and technology level. Sometimes, we wonder if, in the absence of a unique positioning, there is too quick a pivot toward building one in the realm of sustainability.

Positioning DSM: The Value of ‘Real’ Sustainability

Isn’t it too obvious that chemical companies like DSM have everything in order in this regard, that they use their technological knowledge to make the world a bit more livable for everyone? Isn’t that their core business, where they can also make a significant profit by selling that livability? When something is too obvious, we, as positioning experts, don’t find it particularly distinctive. An IT service provider, electronics company, or even the tax authority could also position themselves as making the world more livable. Oh wait, haven’t they already been doing that? Can you name a brand that couldn’t adopt the same positioning?

Positioning DSM: Distinguishing?

For the sake of illustration, we quickly examined a few of the largest chemical companies; what do they say?

– BASF: “through science and innovation we enable our customers in nearly every industry to meet the current and future needs of society.”
– DOW Chemical: “Dow’s team of scientists and experts are addressing the world’s most pressing challenges – enhancing the quality of life for current and future generations.”
– Sinopec: “What you’re doing for a greener life, is what we’ve been doing for you.”
– LyondellBasell: “Our products play a vital role in improving the quality of people’s lives.”

We don’t need to conduct complex analyses to identify a common theme here, do we?

In short, we can’t make it more enjoyable for DSM, but we can make it easier. Our advice to silence all proponents of a split is to search for what truly makes DSM unique and tell that story. Not top-down but bottom-up. In reality, DSM hasn’t captured that much-discussed X-factor yet. If they don’t find it, we do see a split as inevitable.

Would you like to learn more about positioning and how to work on it yourself? Read our Positioning page, where you’ll find in-depth articles as well as dozens of examples and models for any positioning challenge.

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