Polish Your Company Image to Boost the Bottom Line

FF Fashion

A Jul'08 BT article which I came across tonite.... A bit long but it's interesting, definitely a good read.

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Sat, Jul 19, 2008
The Business Times

By Chuang Peck Ming

FOR a company in tiny Singapore venturing into the global market, the world out there is a big place. Its product is easily lost in a sea of similar but competing products.

To stand out from the crowd and get the attention of customers, branding is the answer.

'The key objective of branding is differentiation and hence influencing consumer behaviour,' says Tan Kok Hoe, deputy director of capabilities development at International Enterprise Singapore, a government agency pushing for Singapore businesses to go global.

There are other advantages in building a strong brand - steady sales and profit growth plus lower acquisition or retention cost, according to Mr Tan.

'The cost of acquiring a new customer is always high, as you have to invest in a customer anew and resources are needed,' he says.

'When you build a brand with high customer loyalty, it is easier and less costly to retain their loyalty compared with attracting a new customer.'

Stronger brands command higher premiums. They act as strong barriers against the entry of new competitors.

Besides, a powerful brand wins loyalty among staff, raising morale and making the workplace happy. But you need to cement your company's brand identity - and design is crucial in the role.

It's also crucial in communicating the company's brand values, creating new market segments and boosting its emotional bonding with consumers when the design philosophy is aligned properly with the company's brand values.

'Apple is a clear example of how design has achieved all of the above for its products and services and created a coveted lifestyle choice for consumers worldwide,' Mr Tan says.

'In this way, Apple has used design beyond mere aesthetics to create innovative products and services that support and add tremendous value to its brand, not to mention its bottom line and market value.'

In the predatory global market where the ruthlessness of competition often drive rivals to underhand practices like copying - and piracy is rampant - companies must take steps to protect their business.

Intellectual property management is key here.

'Companies can no longer ignore the importance of IP management as an essential companion in their overseas growth,' Mr Tan says.

'Proper and strategic management of their intangible assets in targeted markets will enable companies to protect, own and extract value from their creations and circumvent threats to their business.'

Often, especially for many from Singapore which are small and lacking in resources, companies also find it necessary to tie up with others to compete in the world market.

'Strong and strategic IP management will enable companies to confidently enter into collaborations with overseas partners, consider licensing and franchising as profitable business models, secure financing using the value of their IP as well as reinforce their competitive advantage and enforceability of rights,' says Mr Tan.

According to Kamil Idris, director-general of the World Intellectual Property, IP management plays a key role in the protection of your brand.

'Brand value is one of the most important assets that a business holds,' he says. 'From a legal perspective, brand creation and management translates into trademark protection.'

It will do a company little good if it possesses a strong brand and good designs, but not the required people to support its drive to go global.

'To succeed in overseas markets, companies must have executives willing and able to work abroad,' Mr Tan says.

'They also require talented local people with an international mindset, who understand local ways of doing business and understand the local consumers.'

Many Singapore companies probably do not have the means to develop all these capabilities to sustain long-term growth abroad.

Mr Tan suggests they pool their resources and capabilities. This raises the question of alliances.

According to him, alliances are the way to go because of several emerging trends - increasing economies of scale; globalisation; fast cycle times and blurring technological boundaries.

'Alliances help firms - especially small and mid-sized enterprises - to invest in state-of-the-art facilities or cutting edge R&D on a shared basis, thus avoiding the excessive burden due to high investment requirement,' says Mr Tan.

Alliances, he adds, are especially valuable in markets located in areas of high uncertainty and require distinct business models, as they can 'offer products and services holistically'.

Are Singapore companies, especially the small and mid-sized enterprises, equipped with strong brands and designs as well as savvy in IP management able to take on the world market?

A poll taken last year shows that the three top concerns of Singapore SMEs operating abroad are overseas business contacts; manpower and strong overseas competition.

Fewer SMEs see 'brand acceptance' as an obstacle. In fact, they pointed out that there is an increasing recognition and acceptance of Singapore's brands.

Mr Tan's take on this is that 'the importance of branding to overseas business development has gained acceptance among the local companies'.

According to him, most local SMEs are also aware of the value of design but many are unsure of how to build design into their business strategies.

'(And) for a number of companies, design is still perceived as a cost, rather than an investment because its returns are not immediately visible to management,' he says.

Local SMEs are also already informed of the need for IP protection and are registering their trademarks and filing their patents in targeted markets.

But Mr Tan says they need to be 'more forward-planning and be tuned in to future piracy threats in other territorial markets that may not be on their immediate radar screen'.

As for alliances, he says that things are also looking up.

'There is increasing willingness and appreciation of the benefits of partnering to venture overseas among Singapore companies.'