Page 16 - Intangible value

employees’ competence – professional skills, motivation, expertise – is an estab- lished way to act and operate and at best companies can transfer competence from one individual to another, and even from one generation to another. It is particular- ly this operating practice within a speci c corporate culture that is dif cult to copy even if the products themselves could be copied. Competitive advantage remains in companies with a strong corporate cul- ture even if old employees left and new ones were employed. On the other hand, a strong corporate culture may also be a hindering factor if it is not able to adapt to the changes in the environment.
In Finland, developing a brand or corpo- rate culture is still typically considered a marketing expenditure, not an investment. Investing in a brand does of course not guarantee that its value will increase – but neither is acquiring a facility or a machine a guarantee that there are skills required to use them more ef ciently than the pre- vious ones, that productivity will increase and, above all that sales will increase or the price paid by customers can be raised. A risk is always involved in investments. However, intangible investments are al- ways a necessity for an entrepreneur.
Roughly speaking: the more digitalised the sector becomes, the more important the long-term development of issues re- lated to brands and usability as well as availability will be. Similarly, the tradi- tional material targets will require smaller investments.
What, then, is tactical marketing i.e. di- rect sales promotion and what, on the other hand, strategic brand develop- ment? The current school of academic research on marketing relies on customer value and no longer makes the traditional strict difference between the two. Fruitful brand development also always improves sales as an increase in unit prices, discov- ery of new customers or additional sales to existing customers. But it is not pos- sible to improve the following month’s sales without a strong presence of brand communication in marketing operations.
Creating and re ning intellectual capital gives the entrepreneur a lot of opportuni- ties but there is often very much compe- tition on the playing eld. Large and small players mix happily on the playing eld, often across the boundaries, and not only across the boundaries between states but also between sectors. Problems arise as, because the value of intellectual capital depends on the ability and competence to make use of it, it is dif cult to measure it. Therefore it can very seldom be used as a guarantee or apport as such. But if its value has been xed into something through agreements, these weaknesses may turn into possibilities. Most impor- tantly, when companies breathe at the same pace as their target groups, there are no limits to the possibilities.
Those who at some point give up their company by selling it are rewarded with a very concrete indicator for the value of intangible capital: the goodwill value that the buyer is prepared to pay for the com- pany on top of its balance sheet value. The shares of corporate culture, intellec- tual property rights and the brand cannot necessarily be distinguished in the good- will value in a company acquisition but all the same: that stack of notes is surely the most concrete manifestation of value.
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