Importance and benefits of a positive corporate image
A positive corporate image is one of the elements which helps the corporate to “stand out” and allows it to gain competititve advantage. It is becoming increasingly important due to the following trends observed today.
Globalisation. When a company enters a new market, it brings along all the strengths and weaknesses of its corporate image. Its image affects its position in negotiations with local authorities, suppliers or partners. The more positive the image, the higher the company’s negotiating capacities; and the more negative the image – the less persuasive the company will be.
Spread and homogenization of products. Globalisation leads to increased homogeneity of products and services offered on different markets (for example, due to the world-wide franchising system). As there are a great number of products available on the market responding to similar needs, their choice is difficult. Every day, millions of consumers around the world make these choices, guided mainly by their general perception of the product’s manufacturer. A corporate image is their subjective perception of a given company existing in their minds. In many countries, local entrepreneurs imitate the products or services of more renowned foreign corporations. When the difference is negligible, the corporate image becomes a strong material source of differentiation.
Availability of information. The unceasing flow of information and the growing number of sources disseminating information have led to a situation in which the quality of different products and services of different organisations is difficult to discern. In these conditions, consumers, investors and potencial employees turn to companies with a good reputation.
Media frenzy. The confluence of modern technology and the increasing dependence on information in the everyday lives of people in developed societies means that media today play an increasingly influential role in shaping the opinions about a company.
Annoyance with advertising. Traditional advertising and marketing campaigns with the use of billboards, radio and television are becoming less and less effective. Public opinion is paying less attention to the message, which means that advertising space and its CPM measure is becoming less meaningful and progressively irrelevant. The strategies for corporate image modelling with the use of various PR instruments are gaining in importance, as they affect public perception with greater impact.
On the other hand, however, current trends are contributing to the growing risk of deterioration of a company’s reputation. Globalisation is creating new challenges, such as: decentralised management, understanding and accepting diverse cultural values or the need to develop new business models adjusted to the changing conditions.
Today, nobody doubts the fact that a positive corporate image brings many benefits. Companies with a positive corporate image attract greater consumer attention, which translates into growth and higher purchasing frequency, as well as the ability to set higher prices (often creating premium products), which leads, on the one hand, or higher revenues and/or growth of market share, and, on the other hand, to lower costs, as capital costs are reduced (suppliers are willing to cut prices for renowned buyers, because cooperation with them is more stable and because such cooperation contributes to their own reputation), as well as distribution costs, and staff costs, thanks to reduction of employee turnover (better attitude and efficiency of employees).
Moreover, companies with a positive corporate image have a greater ability to gain access to new, global markets and to attract and maintain talent and investors. Such companies are more immune to attacks and crises, so they find it much easier to survive a crisis due to high buyer loyalty or a friendlier attitude of the media. Consequently, a positive image leads to a higher market value of such companies. On the contrary, a negative image leads to lower interest in the company’s assets (and, consequently, reduced value), deteriorated negotiating position f the company, drop of demand for products manufactured by the company or loss of qualified staff. It becomes evident that complex measures for the creation of a desirable image need to be taken.
LexPoland Business Consulting is always ready to create a new image strategy for your company at each stage of its existence, as well as to prepare a plan for comprehensive image creation even before company formation. We also implement strategies already adopted.
For a custom consultation, do not hesitate to contact us. We guarantee professional advice and full discretion.