Wednesday, February 12, 2014

Your Global Brand: Reconciling Business Models and Supply Chains

On Abe Lincoln’s birthday, we can derive inspiration from the life and lessons of “Honest Abe.” Like your parents told you, you are known by the company you keep.  This is true for each employee in a service business as well as the entrepreneur, the growing business and the global business.   Your business model and your associations with others directly impact your business success.  Increasingly, you need to orchestrate your business operations and branding messages across both individual and shared brands.

Now, more than ever, creating and managing your global brand is essential to all aspects of your business, beyond attracting and retaining loyal customers under an understood trademark.  Every business today is a service industry, and your brand reflects quality of service and user experience (UX) for everyone who touches your business.

Value Chain Branding.  Brand management means running all aspects of your business as a strategic relationship throughout the entire business value chain. Your global brand transcends across customers, employees, suppliers, outsourced service providers, investors, professional advisors and even regulators and competitors. Think of the benefits of a strong brand in terms of strong corporate culture, employee morale, investor confidence and enterprise sustainability.

Proprietary vs. Shared Brands.   In the American culture, individualism and community can collide.  A proprietary brand is owned, controlled and managed by one enterprise.   A “shared brand” is the brand of shared enterprise.  The logic of collective action suggests that individuals and small and emerging businesses should brand themselves uniquely, while joining in shared brands that may include competitors and suppliers.

Managing Your Own Brand.   In the individualistic enterprise model, managing your own brand requires trademark registration in relevant markets (including countries where you source your products and services).  Think Coca Cola®

Sharing a Brand.   The Big Four accounting firms and the global law firms might present themselves as partnerships, but they  segregate their operations for tax, legal and regulatory purposes by setting up a common brand and then licensing it to themselves.  That’s sharing a brand at the individual enterprise level.  The leaders develop the concept, the membership follows the model and markets under the shared brand. Think Ocean Spray®, a cooperative of growers of cranberries.

Sharing a brand normally means losing your individual identity.   Ironically, in the services industries, the value of a shared brand depends on the quality and integration of the components (individuals) operating under that brand.  By marketing and delivering your own unique skills, doing your own blog and having your own little team within a larger organization, you can enjoy both the economies of scale of the larger organization and the unique profile that attracts and sustains your own clientele.  For this reason, broker-dealers, law firms, consulting firms and other service enterprises encourage each individual to be a rainmaker with unique talents and to team with others offering collective and synergistic talent.

Co-Branding.  Consider possible solutions to piggy-back upon the goodwill of others:

  • Creating new venues by co-marketing (under different brands) of different goods and services to the same target clientele.
  • Advertising to your target clientele in venues that your competitors do not use.
  • Giving financial incentives to referral sources by “partner referral” or “business partner” programs.
  • Earning a “certification” from a well-respected source of trust, such as a top university or the International Standards Organization, or other non-profit or non-governmental organization.
  • Participating in the development of industry standards.
  • Building a new trademark and enlisting others to sell under it, either as licensees, franchisees or even as co-owners of the brand.
  • Becoming a strategic advisor or “resident” expert to a university, think tank, startup incubator or non-profit organization.

Interplay of Individual Brand and Your Supply Chain.  Sharing a brand can also mean building a network of trusted suppliers and service providers who are the back-end of your service delivery platform.  You need to manager your suppliers to ensure you deliver on your promises (and your regulatory compliance obligations).   Otherwise, you have no business, and you have legal liability for breached contracts.  Think about your vendor contracts and your supply and service contracts for your customers.

Joint Ventures, Strategic Alliances and Teaming.  Synergies also come from collective operations that are either new enterprises or an extension of your own enterprise using third parties as co-providers or as suppliers.  Dow Corning has been a joint venture for over 40 years and has developed its own customer.  CSC (US) just announced a partnership with HCL (India) that enables CSC to deliver data center management and cloud computing using HCL as supplier and HCL can enjoy the benefit of CSC’s sales and customer relationships.  Think about introducing a strong “partner” to return and engage clients.

Rethinking your Brand Strategy.   Effective branding strategies bear fruit upon sale of the company, since trademarks and goodwill are valuable marketable assets that can be sold separately (like Abercrombie and Fitch) or as part of a business.  These distinctions might help you rethink your brand strategy and develop and support multiple brands for yourself.

P.S.  I’m being interviewed on the relationship of business models and global brand management tomorrow at 2 PM ET, at