In an era of diminishing profits for global corporations, brands are not expenses. They are bulwarks against commoditization. Strategic investment is required.
New World Disorder
The Economist recently published a survey on the retreat of multinational companies (MNCs). More than a response to President Donald Trump’s protectionist browbeating, retrenchment is a result of structural headwinds including: local governments increasingly committed to enabling small business; supply chain decentralization; and instant global markets for small companies courtesy of the internet.
Not surprisingly, the financial performance of organizations that generate more than 30% of revenue outside their home country have regressed markedly; over the past five years, profit is down 25%. For forty percent of MNCs, return on investment (ROI) hovers around 10%, the danger zone of underperformance.