From BusinessWeek Mag The new power of brands.
IBM's sale of its PC division to China's Lenovo Group highlights one of the most distinctive characteristics of current-day capitalism. In a global economy based on commodity production, brand may be a corporation's most important asset.
And brand management is an increasingly critical skill for a growing number of businesses around the world.
Chinese companies attempting to break into overseas markets are desperately trying to buy or build global brands. U.S., European, and Japanese companies seeking to move beyond price competition are beginning to rely on the emotional punch that great brands offer to win consumers and maximize margins.
Creating a satisfying consumer experience by focusing not only on price but also on the look and feel of a product or service is the new competitive arena. Companies around the world that get it have an edge over those that don't.
In the end, brand is all about culture.
As prices fall for virtually all commoditized, manufactured goods, the real competition will be in winning the hearts and minds of consumers. Intellectual property lies more and more in a company's knowledge base of consumer tastes and preferences, not in chemical formulas or technology per se.
With consumers having more TV channels, more websites and less time, brands are going to have to find a way to connect with a smaller group of people on a more intimate level.
Welcome to the world of tomorrow.