Two companies stood out on Interbrand’s global brand asset evaluation this year. First, Samsung rose to eighth place in the global brand ranking, with its brand value assessed as 42 trillion won ($39 billion). The other is Toyota, which had dropped to 27th after massive recalls, but is now ranked 10th, beating No. 11 Mercedes-Benz and No. 12 BMW.
In psychological terms, resilience refers to the ability to stay intact in adverse conditions. As the strength of each object varies, so does the strength of people and companies. A company with strong resilience can rise to a higher position after falling to the ground. To do so, the company must have consumer trust.
A company never intentionally breaks the trust of its customers. However, when it is violated because of mistakes or incidents, the method of recovery differs from company to company. Resilience is built on consumers’ trust and brand loyalty. How can a company raise it?Corporate social responsibility
Companies are now caught in a trap of good deeds. They believe that the more good deeds a company does, the more consumers will like them. Corporate social responsibility is to assume legal, economic and moral responsibility for interested parties who affect and are affected by companies’ business activities. Samsung invested around 400 billion won in CSR in 2012, but no one seems to have clear answers on how effective this has been. As most of the budget was spent on philanthropic activities, it did not help it make profits. Still, it is difficult to reduce the budget for CSR, as consumers view it as a good deed, which naturally raises brand trust and resilience. Shift to creating shared value
Professor Michael Eugene Porter from Harvard University presented the idea of creating shared value for the first time through Harvard Business Review. CSR has little to do with profit, as it is usually done after those profits are made. However, CSV is to engage in business activities that create both social and economic value.
CSV involves partnerships between companies and regional communities to expand the total amount of economic and social value. Management guru and professor Philip Kotler viewed CSV ― a mutual harmony of values demanded from consumers, businesses and society ― as a management strategy for future markets in his book “Market 3.0.”
Consumers want companies that are like friends. They want sincere companies with which they can share a friendship and solve problems, and not companies that only do good deeds sometimes. Through CSV, companies can earn a positive reputation, trust and profit in the long run, and they can also be resilient in difficult times. I hope more Korean companies develop brand assets with resilience.
|Prof. Park Heung-soo|
By Park Heung-soo
(Yonsei University School of Business)