Another survey on the top 100 global brands has just come out, and yet again Japanese brands are not punching their weight, considering the size of their revenues and the Japanese economy. How you measure brand value is of course a contentious point. It’s often an attempt to quantify how much it would cost to buy the brand, based on some kind of residual figure from the value of the company – having subtracted all the other assets – as well as qualitative research on customer evaluations.
Some of the Japanese corporate names missing from the list would come nearer the top if only Japanese customers were surveyed. But even then, I’m guessing the monetary value that could be attached to the brand would still not be as high as for some Western companies, due to the fact that Japanese companies don’t focus so much on profitability, or even “branding”.
Discussions about brand with Japanese executives seem to indicate that they see a “brand” as mostly about advertising and visible forms of identity such as logo and image.
To compete on a global basis, Japanese companies need to understand better what Western customers expect from a strong brand. But there is a danger as well in becoming too focused on brand, to the extent that it becomes a form of egotism, and prevents collaboration.
It’s been over 15 years since NTT DoCoMo Inc launched its i-mode service, putting Japan far ahead of any other nation, even the US, in terms of customers using sophisticated mobile phones to purchase applications and content on the internet. The rest of the world wondered ho to replicate Japan’s success, and many speculated this could never be reproduced outside of Japan because of some kind of special cultural characteristics of Japanese consumers and society. Now, looking at the global success of the iPhone and other mobile technologies, there is no doubt that consumers across the world will buy applications and content for their phones, given the opportunity.
My view is that took the rest of the world so long to catch up because non-Japanese network providers and mobile phone handset manufacturers were so busy protecting the profitability of their brands, that they were unable to replicate the mutually beneficial supply chain ecosystem that DoCoMo built up in Japan.
When I went to Japan in 2002, assisting a British mobile phone application developer, DoCoMo refused to take the credit for a particular image recognition application that it was offering, saying they were only a network provider, and we should talk to the application developers. The application developers said they just provided applications for whatever features handset manufacturers were incorporating. The handset manufacturers said they were simply humble suppliers to the network operators.
Now, with the advent of cloud computing, and an increasingly networked society, Japanese companies are wondering how to compete against the likes of U.S. online titans like Amazon and Google. Strengthening their global brands will help, but they should not lose sight of the fact that a key element of many Japanese companies’ brands is their ability to collaborate, without egotism.
This article originally appeared in the Nikkei Weekly
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