The Brand Strategy: Keeping the Brand Alive!
By Ernie Chen

As the global economy moves ahead with the knowledge driven economy in the mid 1990s, the real wealth in the modern enterprise is located in the intangible assets of that enterprise and not in the “traditional (tangible) assets” such as real estate, plant, equipment, inventory, cash, and the like.

To appreciate the importance of these intangible assets, we need only look at the market capitalization of many of today’s most successful organizations, or at the prices paid well beyond conventional assets in recent mergers and acquisitions.

In 2000, Microsoft with a market capitalization of over $423 billion reported revenues of only $23 billion. And if we check its balance sheet, and add its stated conventional assets of $52 billion to its annual revenues, we are still left with $348 billion worth of market cap of unspecified value? What accounts for this $348 billion? Experts agree this represents Microsoft’s intangible assets or “Intellectual Capital.” These days, on average, the intangible assets in many successful organizations are worth more than their traditional assets plus annual revenues.

A simple index of all the elements of Intellectual Capital, is “the Brand.” The Brand include all the human capital, structural capital and most important the customer capital of most intangible assets and the Intellectual Capital wealth that an enterprise has created over time. With this in mind, we can see why “the Brand” has moved to the center of corporate strategy. Increasingly, it is becoming one of the most valuable assets in the organization. Furthermore, it is a primary strategic asset as regards both competitive strategy and sustainable competitive advantage.

If the Brand is the central Intellectual Capital asset, then a Brand Strategy is essential to managing that asset effectively. In other words, if we do not know what the organization stands for; and if we are not driving what it stands for into the minds of the consumers, customers, employees, and other stakeholders, then we haven’t yet really positioned the organization

Your organizational Brand may be your most valuable corporate asset, and the asset you can most uniquely and powerfully leverage into achieving sustainable competitive advantage in the new economy moving forward.

Last updated - 31 March 2005