STEP FOUR: BUILD INTANGIBLE ASSETS
Business of the 21st century is different to business in the 1900s. Last century business growth depended on scale. and smaLL businesses unabLe to raise sufficient funds to which larger businesses had access. remained local or niche operators.
21st century business however is a global one (available even to the smallest of operators). driven by technology and becoming increasingly fragmented. Intangibles. including brand-building. worker training and advanced organisational practices. are at least as important as scale - if not more so - for growth because they create assets that can be Leveraged for greater revenue. They enabLe more efficient use of valuable resources making it easier for organisations to compete even with limited funding.
All businesses should have at least a rudimentary understanding of intellectual assets if they wish to be competitive. We no longer operate in the production era; we are now participants in the knowledge economy. Without access to the same intellectual asset expertise as their larger counterparts. small businesses will fall further behind. while understanding how to develop intellectual assets can create a more LeveL pLaying fieLd for smaller organisations.
It is important to note that all brands are made up of intangible assets. A brand is simply the point where values and activities intersect. While the visible part of a brand is its design. without intangible assets it's only a logo. not a brand. In other words. if there is no 'inner brand' there is no brand.
Small brands that are not globally-recognised can still reap the benefits of branding:
• Greater consumer loyalty – people are more likely to trust a business with a brand they recognise
• Lower price sensitivity – brands are recognised for delivering more than the basic product or service so people are more willing to pay for them
• Less vulnerable to competition – brands build trust over time so new entrants that have not achieved the level of trust will find it more difficult to compete
• More readily able to recover from disasters – if the unthinkable happens. a trusted brand has a greater chance of re- establishing a relationship with customers (as long as the crisis was well-handled of course) than an organisation without an established brand
• Brands are the means through which an organisation. Product or service's values are communicated. therefore brands increase the likelihood of survival
Disney is one of history's most successful companies with a brand that has been much loved by generations. In 2012 the Disney brand was valued at S19b or 70% of the company's overall S27b valuation.
Of course Disney has enormous resources at its disposal but it does not attribute its success to its physical assets. Bruce Jones. Programming Director for Disney Institute. the professional development and external training arm of The Walt Disney Company wrote a series of articles about leadership