Academic journal article Management Dynamics

The Role of Region in Global Brand Value Growth by Industry and Brand: A Multilevel Analysis

Academic journal article Management Dynamics

The Role of Region in Global Brand Value Growth by Industry and Brand: A Multilevel Analysis

Article excerpt

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

The resource-based view (RBV) of the firm (Barney, 1991) matured over two decades, emerging as resource-based theory (RBT) to explain firm performance (Barney, Ketchen and Wright, 2011). The RBT identifies organisational resources (Penrose, 1959) and capabilities in the form of tangible and intangible assets (Molley, Chadwick, Ployhart and Golden, 2011) as foundations of the theory (Conner, 1991). Three important assumptions describe how RBT is applied empirically. Firstly, firms within an industry are heterogeneous in their resources and available capabilities to gain advantage over competitors (Barney, 1986). Secondly, the issue of imperfectly imitable resources implies that valuable and rare resources that are owned cannot be acquired or copied by competitors (Lippman and Rumelt, 1982). The inability to imitate leads to long-lasting benefits (Rumelt, 1987). Thirdly, this explains why firms can consistently outperform competitors over time (Barney, 2001; Collis and Montgomery, 1995;Wernerfelt, 1984).

This study examines the relevance of RBT for managing long-term brand value growth across global regions. In management literature, the role of marketing in RBT refers to the process of generating and sustaining customer value (Grant, 1991). In marketing literature, brands are described as market-based assets that generate customer value (Srivastava, Sherwani and Fahey, 1998). Brands as value-creating market-based intangible assets function as heterogeneous organisational resources, which aligns with the RBT assumptions of rarity, being difficult to imitate, having long-lasting effects, and eventually contributing to superior firm performance (Srivastava, Fahey and Christensen, 2001). The ability of strong brands (Aaker and Joachimsthaler, 2000) to add value (Aaker, 1991), attribute profits directly derived from brand equity (Simon and Sullivan, 1993) and grow intangible wealth as brand value (Murphy, 1989) are linked to shareholder value (Gupta and Zeithaml, 2006; Keller and Lehman, 2006; Madden, Fehle and Fournier, 2006; Kerin and Sethuraman, 1998). Growing brands internationally has the potential to maximise long-term brand value (Keller and Lehman, 2009), indicating the importance of global brands (Özsomer, Batra, Chattopadhyay and Hofstede, 2012). Global brands are associated with new products, market share growth and brand identity consolidation, resulting in brand values correlating with stock market firm valuations (Steenkamp, 2014). The success of technology industry brands has produced brand value growth performance that is hard to ignore. Global brand value rankings reveal how the United States of America (USA)-based brands 'within' the technology industry (Apple, Google, Microsoftand IBM) produced outstanding 'between' industry brand value growth (BrandZ, 2014). The consistency of technology industry brands outperforming global industries such as retailing, automotive, financial institutions and many others, raises the question: "What is the influence of 'industry effects' and 'firm effects' in explaining global brand value growth performance across global regions?"

The purpose of this study is to isolate industry effects from firm effects in a multilevel model (Snijders and Bosker, 2012; Raudenbush and Bryk, 2002a) by investigating region as a predictor of global brand value growth over time. Multilevel modelling allows for testing of predictor variables at different hierarchical levels of interest (Rabe-Hesketh and Skrondal, 2012; Rabe-Hesketh and Skrondal, 2008). Following RBT, brands as an intangible heterogeneous resource at firm level are of particular interest relative to their importance at industry level (Molley et al., 2011). Based on evidence that emerging economies contributed to a shiftaway from USA-based dominance before, during and after the global financial crisis (Suder and Suder, 2013), the variance component effects of region on global brand value growth remain unexplained. …

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