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Corporate Strategies for a Nation's Success

By Savas Kyriacou and Thomas Cromwell

Studies indicate that about one third of the world's wealth lies in corporate brands. Thus, although brands are considered intangible assets, the owner of a successful brand possesses wealth.

This simple truth is of enormous importance to nations today. Think of a nation as a highly diversified international conglomerate, which trades internationally, seeks international partners to grow its businesses and depends on its reputation for business development. The conglomerate knows that to develop it has to attract the players necessary for success, including the most talented employees and the best representatives. It strives to secure excellent financial ratings, industry recognition and respect in the marketplace. Similarly, a nation typically has a very diverse range of products and services and offers a unique set of opportunities for business. Its core international agenda is to establish a good reputation in the world, to export its products and services and to attract inbound investment to develop its economy.

What, then, can a nation learn from an international conglomerate? Since there are many significant parallels between the two, the lessons of corporate success are widely applicable to nations. How do international conglomerates build good reputations? How do they go about developing markets around the world? How do they attract investments in their industries? How do they create the conditions that will attract the best talent? And how do they secure effective representatives? For a nation, the questions become: How does the nation build a good international reputation? How does it expand the export of its goods and services? How does it attract investment in its industries? How does it create a well-educated, competent and contented work force? And how does it secure an effective international network of representatives?

For both the conglomerate and the nation, a key to achieving these shared objectives is the creation, development and management of a successful brand.

Although few governments or peoples think of their nation as a brand, every nation does have an image in the eyes of the world, good, bad or mixed. However, this brand image was most likely created haphazardly, by good fortune or bad. A country with beautiful nature, great tourist destinations and wonderful exports is likely to enjoy a positive image in the world, an identity that will serve to multiply its exports, investment and tourism. On the other hand, a nation with heavy pollution of nature, torn by civil war, wracked by poverty and disease or lacking the rule of law and basic infrastructure is likely to be judged an unattractive member of the community of nations, a place not likely to produce anything of value and a high risk for investment. Unfortunately, there are still many countries in the world today that have all of these negative elements, and many countries which have at least some of them.

And yet the economies of even the smallest states are worth hundreds of millions of dollars, while most economies are worth tens of billions of dollars, and the larger economies are valued at trillions of dollars. The leaders of companies worth much less than the smallest national economy treat their brands with great care and invest significant resources in brand development. Surely for every country, then, developing and managing its brand should be of uppermost concern for its government and other stakeholders, such as the business community and non-governmental organizations (NGOs). After all, whether your global image is good, bad or mixed, there is room for improvement of your brand. And, unlike conglomerates, which can collapse and vanish when poor leadership or internal weaknesses bring them down, nations continue because their people must continue to live.

There is no doubt that for all nations, regardless of their situation, there is a very significant return on investment from branding. The costs of nation branding are tiny compared with the benefits the results will produce.

Furthermore, the effective promotion of the brand in target markets will only increase this return. Can you imagine, for example, Mercedes depending on its world-famous brand to sell cars all by itself? Mercedes uses its stellar brand to advertise its products. Without advertising, its sales would slump, even though it is such a well-known and highly respected brand. Countries need to do the same. They need to establish a good brand, and then promote that brand and the products and services it represents through appropriate media.

In practice, though, very few nations use the marketing and advertising tools of modern corporations to achieve their core international economic and political agendas. Rarely do countries recognize that they are a brand, rarely do they use a brand to unify their marketing resources, and rarely do they effectively advertise their products and services under a common brand. Most nations don't even have a budget for marketing and advertising themselves, even though millions or billions of dollars in potential business are at stake. This needs to change.

Today's global economy is a sophisticated matrix of business and government relationships that can be influenced positively only with a good brand and effective messages delivered with suitable communications tools. For any nation, the more focused and targeted its brand and messaging, the more likely is it to succeed in reaching and influencing its prime audiences. This is particularly true now that we live in a shrinking world, with trade and labor relations often a function of international agreements and information swirling around the world and around the clock through a plethora of media. To succeed in this age of globalization, every state has to devise its own strategy for success, identifying niche markets for its particular set of products and services.

A good strategy for corporations and nations alike is to get the maximum benefit for each of its constituents by adopting unifying images and themes. Thus General Electric, rated the fourth best-known brand in the world by Interbrands, sells everything from aircraft engines and refrigerators to CT scanners, financial services and media under a single corporate brand and unifying slogan: "Imagination at Work". With this approach, GE refrigerators benefit from the positive image of planes in flight or people receiving treatment from state-of-the-art technology. Philips takes a similar approach with a similarly diverse range of products and services, using the common tag line: "Sense and Simplicity".

These and similar conglomerates use unifying brands and themes to create associations in the minds of their audiences that contribute to their overall corporate success. Thus GE wants consumers to see its products as the fruit of imagination at work, while Philips wants consumers to see its products as offering sense and simplicity in a complex world. They are offering a single solution for a multiplicity of problems, one place to satisfy a host of needs or desires.

Nations are wise to do the same. For example, by combining the enjoyment of natural beauty or the wonders of period architecture with doing business in a modern, technologically advanced environment, countries are appealing to several core needs at once: the desire for pleasure and relaxation with the need to make money in a modern business setting. Ideally, then, a nation's brand and messaging would combine what otherwise would be separated into tourism promotion and promotion of investment or trade. And by highlighting the achievements of its people, a country implies that its products embody such achievements.

Strong international corporate brands can indirectly build a nation's brand. Thus the United States has been branded as a successful nation by the successful products associated with it, from Microsoft software and Boeing airplanes to MacDonald's hamburgers and Coca Cola drinks. Japan Inc. is associated with the quality products produced by conglomerates such as Sony, Toyota and Nikon. The strength of these brands and the economic power they have delivered to their owners have propelled these nations to leadership of the global economy and global affairs in general. Nevertheless, even these hugely successful nations face challenges abroad and need to invest in managing their brands.

As we have shown, there are strong parallels between a country and a multinational corporation. However, there are also important differences which must be kept in mind if a nation branding exercise is to succeed. A key difference is the nature of their leadership, which necessarily impacts branding. Corporations generally have clearly-defined goals, including marketing considerations, strategies and campaigns. Corporate leaders secure their positions in the corporation to the extent that they are able to implement company objectives. They are likely to be changed if they fail to do so. With governments, however, leaders may or may not agree on common national objectives and, with changes in administration, priorities may shift to satisfy constituencies which are disinterested or unrelated to national welfare and economic development. So far, developing a successful brand for your nation has not been considered a strong selling point for politicians. This should change. A nation's brand is its single greatest asset.

Thus nations need to devise branding and marketing strategies that can survive leadership changes. To do this, they need to get the 'buy in' of as many stake-holders as possible, from government ministries and agencies, to business associations, NGOs, labor unions and other groups. In this way, nation branding actually helps a country look at itself in a fresh light, analyzing what its real strengths and weaknesses are, and what it offers by way of competitive advantage over other nations.

A good nation brand must have longevity. It must transcend election cycles and special interests by capturing the core of a country and its people and what they offer the world. It must engage citizens and national organizations at home while winning recognition and respect abroad. And, as with corporations, developing and managing a nation's brand requires professional input, from research to design. But, as with corporations, the tools and methods needed are already available and can be used for the benefit of any nation.

There are many corporate branding and marketing skills that countries can use at little cost. For one, a nation's brand image should be used across all communications platforms, from the design of letterheads and web sites used by the government and private sector to embassy informational material and international marketing and advertising events and campaigns.

Many national economies rely heavily on just a few industrial sectors, such as petroleum or mining products. Promoting these sectors is good for the economy, but what about the people not benefited by those industries? A wise national strategy would use success in particular sectors to broaden opportunities for all the nation's stakeholders. This can be done effectively through a broad brand that reflects the big picture of the nation, its people and potential.

Branding, for corporations or countries, only works if truthful. Thus a branding exercise might reveal internal weaknesses that have been glossed over in the past. For example, to attract investment, in general a country must be governed by the rule of law, must protect private property, must have modern infrastructure, etc. If it lacks these ingredients, it cannot expect a branding campaign aimed at enticing investors to be successful. The result of this recognition should spur the creation of conditions conducive to investment.

At the same time, analysis of a nation might reveal strengths and potentials which if further exploited will yield rich rewards. Human skills, natural resources, climate, science, technology and location are among a mix of assets that can translate into a competitive edge in the world's marketplace.

Savas Kyriacou and Thomas Cromwell are the principal partners of East West Communications.



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