Reference no: EM133037998

The brand new brand

'The future is bright, the future is orange' sounds somewhat perplexing without any context. Audiences in older age brackets around the world would certainly find it strange. These people would probably not have a mobile phone and would not be frequent visitors to the cinema to see the latest advertising release. By contrast, in the last few years anyone using a mobile network or visiting a cinema (certainly in the United Kingdom) will have been aware of the advertising slogan 'The future is bright, the future is orange'. They might even have read it as: 'the future is Orange'.

In 1994 a new brand arrived: Orange. Back then, nobody knew what it was - in French and English it meant a citrus fruit, and perhaps, a colour in the rainbow. The new logo, a square coloured orange with the word orange picked out in white along the bottom of the square, was designed to encourage consumers to forget the fruit and go for the colour - and ask a question: 'What is orange?' - or more accurately: 'What is Orange?' Thus a teaser campaign opened until everyone finally realised: 'Ah. A mobile phone.' Well, yes and no. Orange was not meant to communicate, first and foremost, that it was a mobile phone company. It was much more aspirational than that; and, as it turns out, much more savvy about the mobile phone market when viewed both as a set of providers and products and, even more importantly, as a large number of customers.

The idea was that this brand was about the future; a future where individuals could use communications when and where they wanted. Consequently, the brand positioned itself as less a provider of a service and more a facilitator of personal communications, and hence, personal identity. Of interest is: 'Where did Orange (Panatone colour patented) spring from at its launch?' Well, it sprang from a past labelled Hutchison and as a subsidiary of France Telecom, the former monopolistic provider of telephony in France, but long since privatized.

It is hard to remember a time without mobile phones. Many people will have had one from their secondary schooldays. Now they are prevalent among primary school pupils. Today they can be used to contact a friend for a real-time conversation ( 'How quaint' some might say!), to give a text-free message suspended in time - to be read at the recipient's convenience, to look something up on the Internet and even to chat online with a series of friends; and all in real time, but not in shared space. Anyone aged over 50, by contrast, thought a mobile phone was for phone calls, preferably outgoing ones only, preferably for emergency use only, such that the quiet scene of picnickers on a midsummer's day might not be ruined by bleepers and alarms (personalized for free, just the effort required). Now mobile phones are not even just one more fashion accessory (although size matters and it has to be small), but are an everyday artefact basic to life.

Could all this have happened to a mobile phone launch labelled Hutchinson Telecom UK and known as French? Perhaps not. The very youthful energy, the zaniness of 'Orange' as a brand name, the enthusiasm of the values of this brand: 'Orange has a very strong vision of a wirefree future' are what has made it successful.

These factors have enabled Orange to be an aspirational brand, with a concept retail unit available for real-time visits by those in Birmingham, the UK's second largest city, or for virtual visits with anyone on the Internet. The changes embraced at launch and feted in the ten-year anniversary celebrations that started in spring 2004 and lasted a year are a necessary part of the success story of this new brand.

Orange's pre-history

France Telecom was spun out of the Postes, Télégraphes et Télécommunications (PTT) organisation, the state-owned monopoly that had provided postal and telephone services in France for decades. Not regulated in the way that British Telecom was as it underwent similar processes, France Télécom developed 'Itineris', which became in 1994 its very successful subsidiary, Orange PCS. The simultaneous launch of Orange in the United Kingdom led to a doubling of the customer base from 379,000 to 785,000 by the end of 1995.

The new executive vice-president, Bernard Ghillebaert, appointed at the end of October 2004 but announced the previous July, has a long pre-history with Orange. He joined in 1976 as a recent graduate of the highly prestigious Ecole Polytechnique et de Télécom de Paris (an elite French university specializing in telecommunications), when the company was France Télécom, and later moved into the new France Télécom Mobile, which in turn became Orange. In this way Bernard Ghillebaud is typical of Orange's executive team: French and steeped in French telecommunications. The global reach of Orange reflects this pre-history as countries strongly connected to France have given it the edge in sub-Saharan Africa. In addition, its English strength has led to compelling positions in English-speaking countries across the world - in the Caribbean and in Australasia.

Orange's history

In 1997 Orange reached the milestone of 1 million customers in the United Kingdom. In June 1999 Orange won the NatWest/Sunday Times Business Enterprise Award, which described Orange as 'one of the outstanding business success stories of the past few years'. By the end of March 2004 Orange controlled companies that had over 50 million customers worldwide. It was the largest mobile operator in the United Kingdom, with 13.8 million active customers and 20.4 million registered customers in France. It is a global operator: the jobs website proudly proclaims: 'A job at Orange could be anywhere in the world', but more specifically, in any of the following countries:

However, to imagine that this is an organisation definable in this way is perhaps to miss a point about organisations and organizing. What it has avoided is defining itself as a manufacturer or provider of a particular product or service. The confident slogan that the future is Orange masks an uncomfortable fact of life: the future is unknown. Even so, for a high-tech company at the cutting edge of personal communications, this unknown future approaches rapidly.

In order to compete in such a fast-changing environment Orange needs to attract flexible, adaptable talent to work for it. On its website Orange lists the benefits of working for the company. The first is time off. In terms of values, Orange advertises itself as an organisation committed to customer service, and therefore to providing a responsive, flexible service, staffed by flexible, responsive graduates, whose needs for flexible working conditions are in turn met by the organisation. In touch with current culture in its recruitment as in its advertising Orange positions itself to its aspiring, recruitment market as a social entity. Its purpose is to increase individuals' personal communications possibilities, and so, with Orange, the future is bright. The organisation has a pattern to it, and that pattern is upbeat, personal and liberating.

In an industry not known for its customer focus, this emphasis on values permeating the organisation has paid off. In June 2003 the sixth annual J. D. Power UK Mobile Customer Satisfaction Survey ranked Orange no.1 in the contract sector for the sixth consecutive time.

The strategic vision

At its launch, and in the preceding branding exercise, Orange had the vision which intended to embody an attitude to the future rather than to sell mobile phones. The corporate identity firm involved in the launch, Wolff Olins, chose from four names - all abstract and unconnected to mobile telephony or even to personal communications. This has led to Orange's story, its meteoric rise in customer base, revenues and significance, being described as 'courageous vision and commitment to the long-running potential of mobile communications'. Orange always focused on the purpose of mobile communications, not the paraphernalia of the product itself.

Its history page on the website:https://www.orange.co.uk/about/history.html, states it has 'a vision for a brighter future, where people can communicate wherever, whenever and however they wish'. Orange's latest challenge is to develop strategic networks: in August 2003 it became a founding member of an alliance, along with TIM (Telefonica and T-Mobile). This was branded FreeMove a year later. This alliance had 170 million existing customers across 15 countries. One month later it agreed to let Alcatel, Nokia and Nortel Networks provide their 3G radio access network (RAN) technology infrastructure across its 'footprint', or area of operations.

A fast-changing and increasingly competitive environment

Providers in the market for mobile phones divide into manufacturers and network providers, and the industry is mirroring the car industry's move from vertical integration as the key competitive tactic to fragmentation and increasing competition in each stage of the value chain, from primary components through design, manufacture, fashion creation and network distribution. In 2002 Orange launched the world's first Windows®- powered 'Smartphone', which combined high-resolution colour, speed and applications such as full web access, easy-to-use, wire-free email and instant messaging, all on a small, stylish handset. Yet two years later it was third to launch the 3G or Third Generation phone, which cost the companies so much to get licences to operate, at least in the United Kingdom. Nokia became the no.1 player in the vertical integration game and approached 40 per cent of the market with share hovering in that range for some years. It then sank to some 28 per cent in 2004 and is not thought likely to recover this lost market share. As a consequence, not only innovating rapidly but keeping to the fore competitively in a changing market is the name of the strategy into the future. Meanwhile Orange was again first to market with the 'Talk Now' service, becoming the first operator globally to launch an international service of this kind.

1. Using the Internet and other sources, as well as the information given in the case study, summarize the elements in Orange's temporal and external environments in terms of the influence it had on the opportunity for this new brand to succeed, 1994-2006.

2. What type of change do you think Orange was pursuing? In terms of the concepts and ideas put forward, particularly in Unit 6, justify your views.

3. How far do you think the changes made have been appropriate to the environments in which Orange was operating?