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    REPORT ONEManaging Corporate Reputation of Brandix Lanka (Pvt) LtdDecember 2010Chartered Post Graduate Diploma in Marketing (Level 7)

    NEXT BUSINESS SCHOOL

    Total Word count: 6441

    CIM Membership no: 9690441

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    Table of content

    Report One: Managing corporate reputation of Brandix Lanka (Pvt) L td

    Executive Summary.......... ........................... ...................................................................................... ............... 03

    1.0 Introduction .. 04

    2.0 Advantages and Disadvantages of Managing Corporate Reputation.............................. ............................. 05

    3.0 The drivers of Corporate Reputation..................................................... ....................................................... 08

    4.0 Reputation Management Process... ................... .............................................................. ............................. 11

    5.0 Recommendations to improve Companys Reputation................................................................................ 15

    References.......................................................................................................................................................... 20

    Report Two: One brand, One team the move towards success

    Executive Summary.... .......................... ................................................................................................................ 22

    1.0 Introduction............... .................................................................................... ..................................................... 23

    2.0 Strategic role of corporate branding in organisations.... ...... .. ...... ...................................................................... 24

    3.0 Issues associated with the acquisition and how it will impact the proposed purchase... ...... ............................. 26

    4.0 Recommendation to maximize the branding opportunities arising from the acquisition............. ..................... 28

    Reference................................................................................................................................................................ 30

    Appendix 1......................................... ................................................................................................................ ...... 31

    Appendix 2............................................ ............................................................ ........... .................... ........................ 33

    Appendix 3............................................ ............................................................ ........... ....................................... ..... 34

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    Executive Summery

    This report highlights how Brandix Lanka (Pvt) Ltd currently manages its corporate reputation and the recommendations

    to improve its current reputation.

    The study evaluates the advantage and disadvantages of managing corporate reputation, drivers of corporate reputation

    reputation management process and recommendations of a formal process that Brandix can use to manage and maintain

    the company reputation.

    The objective of this report is to consider the outcomes arising from a strong corporate reputation and to minimise arising

    issues.

    Combination of advantages and disadvantages of corporate reputation are discussed, in order for the company to be

    successful in future performances. Effective key drivers are used to monitor how corporate reputation works and has

    measured by using key forces. Furthermore at the end of the report a formal reputation was recommended for Brandix in

    order to maintain corporate reputation

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    1.0 Introduction

    Companies have begun to identify that there is a positive relationship between business performance and corporate

    reputation and also it provides competitive advantage. The better the companys reputation it will become more popular in

    the industry and among stakeholders.

    The objective of this study is to review the literature in relation to corporate reputation in Brandix Lanka (Pvt) Ltd, its

    importance for the company, drawbacks and its relation to other concepts such as need for companies to pay increased

    attention to building and sustaining the company reputation for economic growth by using a formal corporate reputation

    management process to shape a unique identity in the industry. Set of recommendations were suggested at the end of the

    report on how to implement a reputation process and how KPIs can be improved due to the new process.

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    2.0 Advantages and Disadvantages of Managing Corporate Reputation

    2.1 What is corporate reputation?

    There is a great deal of evidence to show that organisations have become more interested in the benefits that management

    ofthe corporate reputation might bring (Van Riel, 1995) and the impact that a strong Corporate Brand might have on

    stakeholder loyalty (Balmer, 1995).

    Companys reputation is created by the gathering of all the contacts its various stakeholders have with it. Reputation is not

    build with advertising. Advertising cannot create an image or corporate name it can only communicate. A good corporate

    reputation has to be earned by the tangible things the company does such as higher quality products, better customer

    service. However, reputation can be enhanced through better management of the emotional attachment that stakeholders

    have with the company. People perceive the products of a company, that they respect and trust.

    2.3 The Importance of Managing Corporate Reputation for Brandix

    Brandix Lanka (Pvt) Ltd consider their greatest asset to be is the companys good name or reputation. The company workactively through proactive strategies on sound labour practices, responsible product stewardship, eco-efficiency, cleaner

    technology and prudent resource consumption to build the companys good reputation.

    2.4 The main Benefits which Brandix can gain through good Corporate Reputation:

    There are several advantages a company can gain from actively managing corporate reputation. Such as Companies can

    charge a premium price for their products and services, stock market equity, stakeholder support, better financial

    performance, competitive advantage etc.

    However from the above list following benefits can be achieve by Brandix if corporate reputation is managed properly.

    2.4.1 Stakeholder support

    Brandix can achieve its objectives more easily if it has a good reputation among its stakeholders, especially key

    stakeholders such as its largest customers, opinion leaders in the business community, suppliers and current potential

    employees.

    With good corporate reputation customers will prefer doing business with Brandix even when the competitors products

    and services are available at a similar cost and quality and will influence other potential customers by word of mouth. For

    example, the effort to abolish child labour has helped Brandix in developing business and partnerships with many

    international buyers such as GAP, Marks & Spencer, and Tommy Hilfiger etc.

    Suppliers will be more inclined to trust the companys ability to pay and to provide fair trading terms. If any problems

    occur in their trading relationship with the company, the suppliers will be more inclined to give the benefit of the doubt

    when the company have a reputation of fair dealing.

    Likewise, government regulators will trust more if the company have a good reputation, and they will be less inclined to

    punish if the company trip up along the way. And clearly, a potential employee will be more likely to sign up with

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    Brandix if the company have a good reputation for good treatment of staff compared with a company who may have an

    equivocal reputation.

    2.4.2 Better F inancial perf ormance

    By actively managing corporate reputation will help Brandix to financially perform well in the apparel industry. With

    good corporate reputation, customers will prefer to deal with Brandix ahead of others. This will help Brandix to perform

    well in the market.

    Brandix can measure its financial performance by monitoring the return on sales, return on capital employed, cost of

    sales, gross and net margins, and many others and compare with the previous years reports the difference between before

    and after managing corporate reputation the change in the financial performance.

    However Brandix will have to monitor financial performance quarterly to establish the link between managing corporate

    reputation and financial gain.

    2.4.3 Abil ity to charge a premium pr ice for products and services

    With actively managed corporate reputation, it will help to differentiate Brandix from others. This will add value to

    Brandix products and services and this uniqueness will allow Brandix to charge a premium price for its products and

    services, which in return increase profits for the company.

    2.5 Disadvantages of managing corporate reputation

    Managing corporate reputation is an important role in achieving corporate objectives. However there are few

    disadvantages of managing corporate reputation that Brandix will have to be aware of.

    2.5.1 Applying a model to manage corporate reputation can be costly

    The main disadvantage in managing reputation is that it can be costly than expected. To mange corporate reputation in

    Brandix, company will have to have different conceptual models to customers, investors, community leaders etc. This will

    be costly for Brandix. Therefore, Brandix will have to consider its Return on investment before it builds a process to

    enhance its corporate reputation. However, this cost can vary depending on the size of the business.

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    2.5.2 Dif f icu lt to allocate separate department to manage corporate reputati on

    If Brandix to allocate a different department to manage corporate reputation the company will have to consider space and

    employees which will affect the current company activities. Also Brandix will have to provide training for the existing

    employees regarding how to manage corporate reputation or recruit new employees who have experience in managing

    corporate reputation. Then again, this can be another cost for Brandix.

    The disadvantages of managing corporate reputation can be overcome by the countless advantages that it offers. One thing

    is certain in managing corporate reputation that there is a high cost to pay for losing company reputation. Therefore even

    there are few disadvantages by managing corporate reputation Brandix can boost companys financial performance,

    Increase stake holder support and many more. Therefore Brandix should actively manage its corporate reputation.

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    3.0 The drivers of Corporate Reputation

    3.1 How does Corporate Reputation Work?

    Corporate Reputation is the set of meanings by which an organisation is known and through which stakeholders describe,

    remember and relate to it. Dowling (1986)

    For Brandix Corporate Reputation is a new way of looking at the business, and it helps to improve the financialperformance of the company. This has been proven from many detailed surveys that Brandix has undertaken.

    Figure 3.1.1 illustrates a constructed model which Brandix can refer to identify the relationship between corporate

    identity, image and which in return drives corporate reputation.

    Figure 3.1.1

    3.2 What drives corporate reputation of Brandix

    As per Greyser (1999), Fombrun and Van Riel (2004) there are several factors that drive corporate reputation of a

    company. Such as competitive effectiveness, market leadership, customer focus, familiarity, corporate culture,

    communication, emotional appeal, products and services, vision and leadership, workplace environment, financial

    performance and social responsibility.

    However from the above list corporate reputation drivers for Brandix are as follows:

    Corporate Reputation

    Corporate Image

    Corporate mission

    Visual Presentation

    (Symbolism)

    Corporate Communication

    Corporate Identity

    Corporate behavior

    How stakeholders perceive the

    organisation

    How the company perceive and present

    it self

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    3.2.1 Social responsibil ity.

    Brandix have believed and practiced corporate social responsibility (CSR) for years and managed to develop a reputation

    as an environmental friendly ethical company by doing various projects for the community and environment.

    For example: Brandix has provide an internal clean water supply system for 30 newly settled families who were victims of

    the tsunami and was installed in a housing scheme in Atanakitha, Imaduwa Sri Lanka and donated US$25000 to the

    families of naval personnel who were victims of a suicide attack in Habarana in 2007. By being more social responsible it

    adds more value to companys current reputation.

    CSR evaluates and judge companys attitude towards the community (people) and the environment. By publishing CSR

    practices in media such as newspapers Brandix can boost up corporate reputation of the company. Therefore social

    responsibility is one of the reputation drivers for Brandix.

    The advantage in Social responsibility is it can be controlled by Brandix since the CSR agenda can be created according

    to the company budget and the top management can decide how many projects that the company will do for a year. On the

    whole Social responsibility is a controllable corporate reputation driver for Brandix.

    3.2.2 Financial Perf ormance

    Brandix was able to financially perform well for years. Most of the strategic Business Units (SBUs) in the company was

    able to reach their best performance recording nearly US$ 400 million, a 15% increase over last year. Two SBUs namely

    Brandix casual wear and Brandix intimates recorded stellar performances, specially Brandix casual wear with its One

    Team One Focus concept, recorded a phenomenal turnaround this year.

    If the profitability records are plus it gives strong prospects for future growth of the company and will also helps to

    outperform its competitors. Therefore it will help the company to have a good corporate image. Consequently a negative

    performance will adversely affect Brandix reputation. Therefore Brandix should manage its uncontrollable corporate

    reputation driver by maintaining a good financial performance constantly.

    3.2.3 Corporate cultu re and Work place envir onment

    Another controllable corporate reputation driver for Brandix is well managed corporate culture and work place

    environment. Brandix ensure that the company recruits the right person to the right job therefore it will prevent

    unnecessary problems within the company and will not affect the company culture.

    Brandix corporate culture is determined by three overlapping areas, those are values, work culture and social

    responsibility. Brandix way of working is all about accepting and embracing the company values, and acting with social

    responsibility which supports to enhance corporate reputation.

    Brandix welcome change openness and appreciate the employees at work. In addition to the regular remuneration and

    benefits company rewards its employees with other benefits such as, cash awards for good service, annual bonus,

    transport facilities, free breakfast and lunch, staff loans and many more. Brandix takes initiative to manage the employees

    which in return talk good about the company and will spread to people by word of mouth.Thus maintaining a good

    corporate culture and a working environment automatically add value to Barndix reputation.

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    3.2.4 Products and services

    If any company lives its vision to be the inspired solution to branded clothing, it is Brandix. Today it is the preferred

    solutions provider to some of the worlds best apparel retail brands including GAP, Marks & Spencer, Victorias Secret,

    Next and Abercrombie & Fitch. Association of big world known labels will help to drive corporate reputation for Brandix.

    In this highly competitive market, Brandix will have to maintain the standards of their products and services, offer high

    quality products, and offer products and services that are in good value to avoid customers to look for alternatives. As a

    result the big labels will continue to deal with Brandix which gives a global recognition for the company.

    By knowing the key drivers and forces of corporate reputation it allows Brandix to identify where they stand in the

    industry with their corporate reputation and it helps the company to outperform and also to own a distinct advantage on a

    number of other operational work. It also helps Brandix to have a positive impact on corporate profitability, market and

    total sales.

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    4.0 Reputation Management Process

    4.1 How Brandix currently Manage its Corporate Reputation

    4.1.1 Corporate management pr ocess

    A positive reputation is a key source of distinctiveness, which can differentiate it from its competitors, produce support

    for and trust in the organisation and its products and helps it to attract and retain quality staff, business partners and allies(Fombrun & van Riel, 2004).

    4.1.2 Brandix curr ent process

    Brandix currently has a reputation as an ethical eco friendly company in the apparel industry. However Brandix do not

    carry out a formal process to manage the company reputation. Thus Brandix have systematically built a framework that

    proactively manage environmental, social and ethical imperatives which helps in maintaining the company current

    reputation.

    Table 1.0 illustrates the framework

    Table 1.0

    Source: B randi x Cor porate Review 2007

    Environmental Agenda Social (ethical) Agenda Clean Technology Agenda

    Sustainable consumption of

    natural resources

    Free chosen employment (no

    forced labour)

    Waste minimisation

    Pollution prevention No child labour Energy management

    Protecting Bio diversity Respect of the freedom of

    association and the right to

    collective bargaining

    Process optimisation

    Management of hazardous

    chemicals

    Payment of adequate wages

    (living wages)

    Biochemical treatment of

    effluents

    Solid waste Management No excessive working hours Applications of

    biotechnology in the textile

    industry

    Eliminate use of toxic

    chemicals

    Superior working conditions Use of eco-dyeing for yarn

    and textiles

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    4.1.3 Managing the current process

    Current reputation process in the company has happened naturally over the years and Brandix has taken initiative to

    maintain it. As an ethical environmental company Brandix have undertaken various projects to achieve a sustainable

    status where economic, social, and environment facts will converge towards a common goal.

    The curr ent reputation process is managed by managing the foll owing thr ee factors:

    Four key areas in Brandix apparel integration is wet processing areas in textiles, yarn dyeing, finishing and printing which

    lead to pollution, high energy and water consumption. Brandix as a environmental concern company is mindful of these

    issues and taken action to protect the environment, minimise water consumption and energy and as a result to manage the

    current corporate reputation process.

    Environmental ManagementAll environmental policies and plans are mapped, implemented and carried through by dedicated teams, led by a

    Group Director, with messages cascading to all levels. Each of Brandix plants possess an Environmental

    Protection License issued by the Central Environmental Authority (CEA).

    In order to protect the environment and increase productivity the plants within the group also adhere to the

    standards and systems. These standards and systems are continuously reviewed and monitored internally andindependent audits conducted by United Kingdom Systems and Certifications, and the CEA.

    Wastewater ManagementBrandix works on initiatives that eliminates or minimises harm to the environment, by treating wastewater and

    returning treated water back to its natural habitat. Treated water discharged from Brandix Finishing wastewater

    treatment plant is well within the standard quality requirements of the CEA, which in in line with international

    standards and more stringent with the certain parameters.

    Energy ManagementBrandix has undertaken an overcharging policy of energy management. Designed monitored and verified on

    USAID-SARI energy program protocols, Brandix goal is to reduce energy consumption by at least 15% in

    Brandix Casualwear, Lightsew and Finishing clusters.

    Above mentioned factors are undertaken to manage the current corporate reputation process of Brandix and these are

    internally and independently monitored and reviewed to ensure that they remain continuously ahead. However by usingthe above factors Brandix is unable to appropriately measure the effectiveness of the current reputation process.

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    4.2 Effectiveness of the current process

    Brandix framework (refer table 5.1.1) of operations promotes, perseverance, rewards decisions, activates the quest for

    improvement and encourages innovative drivers, which have resulted in managing the current reputation of the company.

    Measur ing effectiveness of the curr ent reputation process through Communi ty recogniti on:

    Numerous bodies have recognised Brandix efforts in environmental and CSR projects for community development.

    Brandix achievements include the Most Outstanding Exporter of the Year award at the National Awards for Export

    Excellence in 2003. Further in 2005 Brandix Finishing plant was recognised for Environmental Excellence at the CIMA

    Community Leader Awards and Presidents Environmental excellence Award and in 2006 was awarded the Excellence in

    Social Responsiblity Award by the American Apparel and Footwear Association in the Preservation of the Environment

    Category.

    The recognitions and awards stated above have benefited Brandix to create wealth for the company. However since there

    are no key elements and a proper structure to measure the success, the current process is not very effective for the

    company to manage corporate reputation and can create gaps in the process.

    Dip stick analysis was used in evaluating the current corporate reputation process through primary and secondaryresearch. The following evaluation was given by the business magazine, Lanka Monthly Digest (LMD) that

    Brandix is currently holding the 13 place in the Most respected companies in Sri Lanka with a score of 282.

    Brandix has obtain this position scoring in quality consciousness, CSR, innovation, dynamism, corporate culture

    and management profile.

    4.3 Gaps in the current informal process

    Following problems can occur due to the current reputation process

    4.3.1 Unable to measure the effectiveness of the current process

    Current process will fail to provide proper feedback on financial performance and stakeholder support which are

    the main benefits that Brandix can obtain by actively managing corporate reputation

    4.3.2 Production bottleneck

    Employees will be too busy managing the environment, wastewater, and energy and not be able to deliver the

    products on time. This can lead to other concerns as customer complaints which can even harm the company

    current reputation.

    4.3.3 Unable to measure corporate communication

    Since Brandix do not have a formal process thecorporate communication will not managed properly. As a result

    internal and external communication will not interconnect. For example: news paper articles about a recent

    achievement or award received not be communicated with the employees.

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    4.4 Consequences Brandix will have to face if the reputation is not managed properly

    4.4.1 If Brandix fails to manage its good corporate image, the company will have a higher tendency of losing their

    urrent customers. As a result company will have to spend a considerable amount of time convincing them, since

    consumers prefer to patronize service providers which have already established their names in their respective

    industries rather than going to a company which has a bad corporate image.

    4.4.2 Reputation is the companys identity. It articulates the culture of the organisation. Credibility and integrity comes

    with a good name. It is hard to be credible when nobody believes in the company. Relatively, it is also difficult toprove integrity when clients of Brandix talks negatively about the company services instead of recommending and

    promoting.

    4.4.3 Without good corporate image Brandix will never be able to establish trust, confidence, loyalty and superb client

    relationships. The most respectable names in the industry such a Mas Holdings did not reach the zenith of success

    if they did not protect their reputation.

    4.4.4 Brandix will lose good business opportunities if fail to manage corporate reputation. Corporate reputation is like a

    magnet. It does not only attract customers, it also catches the attention of interested investors and business

    partners. They will dare to invest if a company is known for management conflicts and workforce issues.

    Establishing a good image generates tons of possibilities for business growth and expansion

    4.5 Why Brandix need a formal corporate reputation process

    By managing a formal corporate reputation process Brandix can obtain the following benefits in the future since the

    company will be able to measure.

    Improve company financial performance Can strengthen stakeholder support Competitor advantage Charge a premium price Reduce staff turnover

    The current informal reputation process does not entirely support Brandix to boost the company reputation. Therefore to

    enhance the corporate reputation of Brandix the company should carry out a formal reputation process.

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    5.0 Recommendations to improve Companys Reputation

    5.1 How Brandix can improve its corporate reputation

    Reputation is the strongest determinant of any corporations sustainability. Stock price can always comeback. Business

    strategies can always be changed. But when an organisations reputation is gravely injured, its recovery is difficult, long-

    term, and uncertain. A risk to its reputation is a threat to the survival of the enterprise. Firestein Peter J. (2006)

    Brandix actually cant control its own reputation; it can only manage the company in a positive and ethical way, and work

    to communicate this to stakeholders. Brandix can act to strengthen the areas that the company consider important to the

    corporate reputation. For example: Environmental and social responsibilities, financial performance and stake holder

    support.

    Brandix should be alert on the stakeholders attitude towards the company and their relationship with the company.

    Brandix should always be aware that reputation is also affected by the actions and attitudes of others, for example: a

    competitor launching breakthrough apparel solution or making great profits, and by comments from the industry

    observers.

    5.2 Recommended formal corporate reputation process for Brandix

    According to Fombrun and van Riel (2004) there is a connection between a high reputation positioning and how well

    companies express themselves through targeted communication. The company can make the ability to communicate well

    which will help the stakeholders identify the organization and the more stakeholders identify the company, the more likely

    they are engage in supportive behavior.

    With the help from Charles Fombrun reputational management process the figure 5.2.1 outlines a constructed formal

    reputation management process which is recommended for Brandix in managing the company reputation.

    Figure 5.2.1

    Identity

    Research:

    Who are we?

    What do we standfor?

    What do we want

    to stand for?

    Monitorin

    and contr

    Stakeholder

    Audit

    Corporate

    communication

    and PR

    Campaigns

    Assign

    reputation

    management

    team

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    5.3 Application of formal corporate reputation process to enhance Brandix reputation.

    5.3.1 Identity research

    The recommended process will support Brandix to first identify three existential questions. Those three questions are:

    Who are we?, What do we stand for?, What do we want to stand for?. Essentially Brandix need to know themselves

    before the company can communicate to others.

    For example: The answers can be as follows

    Who are we?A company in apparel industry who provides solutions to apparel retail brands such as GAP, Victorias

    Secrets etc.

    What do we stand for?An ethical and environmental friendly company

    What do we want to stand for?An ethical and environmental friendly company which also financially performs well

    compared to competitors.

    5.3.2 Stakeholder audit

    Brandix can carry out a research study designed to determine how external and internal stakeholders perceived the

    company. The recommended research study can be as follows:

    Select three stakeholder groups on the basis of their potential impact on the development of Brandix corporate reputation.

    Customers (150); employees (300); and senior managers (16). Responds from the stakeholders can be collected via a

    structured, quantitative emailed questionnaire. A quantitative approach is recommended for this research is so that a

    direct comparison could be made between the perceptions of the three stakeholder groups. By analyzing the quantitative

    data it was possible to minimize the impact of single experiences of individuals in order to obtain an overall impression ofcorporate reputation

    The findings from the above research will assist Brandix to identify which areas to be improved to enhance and maintain

    its current corporate reputation.

    5.3.3 Reputation management team

    Corporate reputation management should be carried through by a dedicated team led by a group director. Their

    responsibilities can be identified and shown in table 2.0.

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    Table 2.0

    Designation Responsibility

    Managing Director Prudent management from strategy

    resource control

    Maintain with all laws, regulations and

    environmental health and safety

    standards

    Effectively communicating the

    management of corporate reputation

    both internally and externally

    Corporate Reputation Managers Effectively communicating to the

    media about CSR projects, company

    financial performance and community

    services

    Managing crisis communication andmanaging complaints.

    5.3.4 Corporate communication and PR campaigns

    Brandix should create internal communication tools such as intranet, posters and activities within the company and in

    many plants just to inform all the employees about recent achievements of Brandix and the awards that company won to

    show how important to maintain corporate reputation and what it meant to the company.

    Then the company will have to integrate external communication (news paper articles about the recent achievements or

    awards received) with the internal communication, so that there was a common platform in everything the company do.

    According to the US research relating to annual Fortune 500 most admired companies which invested in corporate

    communication experienced a better reputation that companies which didnt.

    Good corporate communication functions such as media relations, speech writing, social responsibility and community

    affairs, donations, corporate and issues advertising, employee communication, department and counselling and spending

    on public relations will support Brandix to manage and maintain the corporate reputation

    5.3.5 Monitoring and control

    Reputation process should be monitored and controlled constantly for Brandix to properly manage the company

    reputation.

    Table 3.0 illustrates a monitoring system which is recommended for Brandix.

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    Table 3.0

    Inputs Agenda Outputs People attending What are the KPIs

    Review group

    performance

    Reputation activities

    New business

    opportunities

    Internal controls

    Human resource

    development

    Human capital

    allocation

    Financial resource

    allocation

    Physical resource

    allocation

    Further resource

    allocation

    Managing directors

    Corporate reputation

    Managers

    Corporate reputation

    executives

    Customer satisfaction

    Corporate reputation

    exposure

    Better financial

    performance

    Stakeholder support

    Board meetings should be conducted regularly (five board meetings per annum) with an attendance record of 90%. In this

    board meetings as mentioned in the above table following should be discussed;

    Corporate reputation team should evaluate and see whether the following factors have increased and managed properly

    due to reputation process:

    Review of group performance Reputation activities New business opportunities Internal controls Human resource development

    Agenda of the meeting should be the how efficiently the company should allocate resources. For example:

    Human capitalSelecting relevant training programs for corporate reputation team

    Financial resources Have a separate budget to manage corporate reputation of Brandix and discuss how efficiently

    should it be allocated

    Physical resourcesallocation of equipments (desk tops, stationary and other materials) for the corporate reputation

    team.

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    5.4 Types of KPIs which can be improved due to corporate reputation process

    Brandix can develop a structure to monitor the key performance indicators once the reputation process is implemented and

    can compare the difference as shown in table 4.0

    Table 4.0

    Key Performance Indicators Target Performance Actual Performance

    Better financial performance

    Corporate reputation exposure

    Customer satisfaction

    Stakeholder support

    Brandix target should be to increase performance and reputation by introducing a corporate reputation process. Howeverthe actual performance can be good, marginal or bad. Therefore Brandix can use the above table to monitor the

    effectiveness of the corporate reputation process for the company KPIs and maintain accordingly.

    It is important to develop a reputation process to manage and enhance Brandix current reputation so that the company

    performance and image will be better. When Brandix is having a good reputation it will be easy for the company to face

    any challenges, which come across that affects the company revenue.

    Word count: 4359

    GOOD MARGINAL BAD

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    References

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    REPORT TWO

    One Brand One Team the move towards success

    Acquisitions and Corporate Branding

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    Executive Summary

    Organisations understand the importance of their corporate brand and realize it is essential that considerable emphasis to

    be placed on creating a brand. The strategic role of corporate branding should be examined to allow management to

    identify the importance of corporate branding to the organization.

    Almost every employee in the organisation should be involved in brand development decision, including all the

    departments, key stakeholders, and sales people. Corporate branding encompasses many fundamental elements, such as

    personality of the organisation, reputation, goodwill, relationships, partnerships, and culture. Time and efforts needs to be

    spent on each of these factors.

    Further, to go above and beyond competing, organisations need to be cognisant of different ways to strengthen the

    corporate brand. One of the methods is to acquire or merge with a competitor. However, there are certain issues

    organisations need to taken in to consideration when acquiring a competitor. For example: uncertainty of the power of the

    acquiring brand and similarity of the two corporate brands.

    At the end of the paper strategies were recommended to maximise the corporate branding opportunities arising from the

    acquisition.

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    1.0 Introduction

    Branding strategy is a focal issue for companies operating in todays international market place. According to (Kapferer,

    1992, pp 46-7) branding means more than just giving a brand name to a product or products. Corporate Brands are a direct

    outcome of the strategy of market segmentation and product differentiation. Companies utilise a combination of brand

    attributes to meet the expectations of specific customers in various economic conditions. Corporate Branding refers to the

    strategy in which brand and corporate name is the same (de Chematony, 1997).

    The objective of this paper is to assess strategic role of the corporate branding, its importance to Brandix and the benefits

    that the companies can gain through corporate branding. Further it illustrates by critically evaluating the general issues of

    the corporate branding and how it will impact on the proposed acquisition. A list of recommendations was produced at the

    end of the paper to maximise branding opportunities arising from the acquisition using strategies and processes.

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    2.0 Strategic role of corporate branding in organisations

    2.1 What is corporate branding?

    A corporate brand is a product of an organisations corporate strategy, mission, image, and activities. Corporate brand

    differentiate the company from their competitors, familiarize the company in the minds of customers and employees, and

    create awareness of what an organisation stands for.

    According to (Balmer, 2003) the corporate brands is seen as a sixth identity type referred to as the covenanted identity,

    which is viewed as independent and distinct. (Balmer, 2001) developed the C2ITE (Cultural, intricate, tangible, ethereal

    and commitment), this reflects the corporate brands unique attributes and helps understand key characteristics of the

    corporate brand. Further (Lawer and Knox, 2004) state that a corporate brands is a way to conceive, communicate and

    manage corporate brand values in order to guide managerial decisions, actions and normative firm behaviour. It can then

    state that brands is generally the name of a product or mark of ownership

    2.2 Role of corporate Branding

    The purpose of corporate branding is to create a distinct and lasting impression of the company. Effective branding creates

    uniqueness, persistent identity that people associate with quality, origin, personality and preference. Corporate branding

    assists the company and the management to focus on the core vision and values and corporate branding will play an

    important role in achieving the company objectives. However to build a corporate brand companies require considerable

    investment and time. However ultimately, corporate branding allows companies to improve the company image, increase

    performance, while boosting public perception of the companys reliability and expertise.

    Strategic role of corporate branding helps companies to identify the foll owing benefits:

    2.2.1 Helps to create corporate identity

    Strong corporate branding involves establishing a long-term vision for the company, carving out pronounced niches in the

    marketplace and boosting the reach and recognition of the company and its leaders on a global scale and ensures a steady

    corporate identity, experience throughout an organisation. For example: Apple has established a very strong identity as a

    design driven and innovative company offering many types of products and services.

    2.2.2 Helps to create reputation and image

    Corporate branding can increase the companys visibility, recognition and reputation to a greater extent than product

    brands. Thus one of the benefits is investors may seek deliberately for companies with better reputation and opportunities

    like brand alliances can take place.

    2.2.3 Creates consumer credibility

    Credibility and trust are intertwined with one another. Strong corporate branding helps companies to create trust among

    consumers. When credibility is high, companies can have positive relationships with the potential customers and secure

    sales. As a result will help the company to increase performance.

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    2.2.4 Promote financial performance

    Strong corporate brand name will help the company to generate continuous revenue in the form of sales also with the

    intangible corporate brand name associated with them due to the goodwill generated by the public.

    2.2.5 Differentiate

    Corporate branding creates a competitive edge that separates the organisation from competitors in the minds of potential

    customers. The more the company build the corporate brand more it will elevate above its peers, and less the company

    will have to convince customers. The corporate branding will help the company to articulate the company values and act

    as a strong competitor in the market

    2.2.6 Umbrella Branding

    Corporate branding will act as an ultimate identifier of the organisation and will stand on top of the brand portfolio. For

    example: In the case of Unilever depending on the business strategy and the potential need for more than one brand

    approach, the company markets different brands under their umbrella.

    2.2.7 Creates Brand equity

    Corporate branding helps create brand equity and can be transferred to other products as well. For example: Volkswagen(VW) company buying the Skoda company. Skodas sales were declining before VW took over, however Skoda has

    improved and company sales has gone up as well due VWs transferred its brand equity to Skoda.

    It is certain that corporate branding plays an important role in the success of any business. Corporate brand name is the

    overall umbrella for the companys activities and encapsulates its vision, values, personality, positioning and image

    among many other dimensions. Therefore, it is important for companies to know the importance of identifying the role of

    corporate branding.

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    3.0 Issues associated with the acquisition and how it will impact the proposed purchase

    3.1 In troduction

    Sensing the companys tremendous potential for growth, in nearby future Brandix Lanka (Pvt) Ltd is planning to acquire

    Kuruwita Textile plant. Kuruwita Textile Mills PLC (KTM) is a Sri Lanka based company which is currently engaged in

    the manufacture and sale of textiles).

    The fundamental objective of this move is for fast textile manufacturing process to take a leading role in the industry, also

    to advance and sustain the establishment as a strong player in the apparel industry.

    3.2 Issues associated with acquisit ions

    Acquisitions act as a trend in the corporate world. Unfortunately, about 75% of acquisitions are unsuccessful in the

    corporate world and tend to ruin the corporate image as well (Ashkenas, Ronald N. et al1998). This failure can happen

    due to various reasons such as The Company not taking notice of the current situation of the market, differences in

    business culture, acquisition costs and changes to financial strength surrounding the corporate takeover.

    3.3 Brandix branding i ssues associated w ith the acquisiti on and how i t wil l inf luence the proposed purchase

    ISSUES:

    Sim il ari ty of the two companies

    One of the problems that Brandix will face is to create a common identity with KTM and align the two companies

    together. Brandix is currently manufacturing garments for global market whereas KTM manufactures textile for

    the local market. This can create a gap between the two companies and will fail to identify a common corporategoal.

    Cultur al diff erences

    Cultural differences Brandix and KTM may de-motivate the existing staff. Thus, positions will be limited and the

    management will have to decide which staff to hold the position after the purchase. Both existing and KTM staff

    can send mixed messages, creating confusion among customers. These factors can result decline in productivity

    and performance of Brandix due to deteriorating morale of the employees. Thus, adversely affect on corporate

    brand.

    Unnecessary cost

    Profitability of Brandix can be affected due to cash flow difficulties and high investment on extensive training for

    untrained staff joining from the acquiring company. Brandix can ultimately face a loss and this loss of revenue

    can fail to create value for shareholders which can ultimately affect the overall corporate brand.

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    IMPACT ON THE PROPOSE PURCHASE:

    As a result of the issues associated with the acquisition Brandix will fail to create a common identity with shared

    values, objectives, current customers will lose confidence and move to competitors and existing staff will be de-

    motivated due to loss of recognition etc. This can lead to market value loses and share price drops. Hence,

    Brandix will be cautious in acquiring KTM.

    However following precautions can be recommended for Brandix to overcome the issues associated with the

    acquisition:

    Discuss and manage all acquisition related problems both internal and external Take early action and ensure that all the existing staff has a clear understanding of what is planned before, during

    and after the acquisition.

    Develop a brand strategy to determine what is achievable with the acquisition and how to extract maximum value. Identify the strengths, weaknesses and opportunities associated with two brand identities assessing their impact on

    the stakeholders and business in general.

    Brandix should decide whether to maintain only the current brand name, adopt both the names or create a newbrand name, also should be aware of the cost attached to this decision.

    Establish brand guidelines to help employees understand, manage and communicate if Brandix decide to changethe current brand name

    Develop a strategy and process for acquisition of the two cultures.

    Acquisitions come in all shapes and sizes, and Brandix need to consider the complex issues involved in acquiring a

    competitor. The most helpful form of equity process involves a complete analysis of the financial resources and benefits

    associated with the deals. Most importantly, before any decisions are taken Brandix should consider not only the benefits,

    legal and financial implications, but also the human consequences. Since all these factors can ultimately affect corporate

    branding.

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    4.0 Recommendation to maximize the branding opportunities arising from the acquisition.

    Brandix expanding involved growth through upgrading manufacturing technology, and acquisitions. Acquisition will help

    Brandix to obtain the knowledge required to compete and sustain growth.

    Brandix i dea of acquir ing KTM is for foll owing reasons:

    Taking competitors out of the industry Scaling up in the apparel sector Acquiring in experienced staff Acquiring technology Reversing into a business that is performing better than the competitors

    4.2 Branding opportunities arising from the acquisition

    Cost ef fi ciency and value generati on

    Generally acquisitions succeed in generating cost efficiency through the implementation of economies of scale.

    Rather than operating as two companies, as one large firm Brandix (after acquiring KTM) may be able to operate

    more efficiently by reducing cost. This often lead to an increase value generation for Brandix. It is also expected

    that the shareholder value of Brandix after the acquisition would be greater than before.

    Sales and market growth

    Immediate sales and market growth is one of the credible opportunities of acquisitions. Financial sound company

    like Brandix acquiring a relatively distressed one like KTM resultant Brandix to experience a substantial increase

    in market share.Thereby Brandix may be able to weaken the competition and create strong branding image in the

    apparel industry.

    I nstant access to a new customer base

    Brandix will be motivated by the immediate access to a new customer base, which is required to compete and

    sustain growth. Access to a new customer base will benefit Brandix by reduction in cost per unit resulting from

    increased production identified through operational efficiency.

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    Opportunities mentioned above are the main benefits that Brandix can obtain from acquiring KTM. However, Brandix

    also can obtain the following benefits through the acquisition.

    Increase Brandinx goodwill, business value and share price in the stock market. Help to upgrade the infrastructure facility Centralised warehouse facility. It will help to minimize future expansion requirement of the warehouse facility for

    Brandix

    4.3 Recommended strategies to maximise branding opportunities

    Maximise economies of scale

    Strategy is to coordinate labour and material purchasing under bulk contracts thereby reducing unit costs. This

    will help Brandix to maximise economies of scale in the purchase of raw materials, supplies, manufactured inputs

    and labour. Brandix can maximise these benefits though purchase agreements with local vendors.

    Meetings to communi cate wi th the new customer base to understand them well

    Increase sales for existing customers using additional sales methods. For example make use of the economies of

    scale as mentioned above. This will help to boost the market share. Brandix can organise a formal meeting to with

    the new customer base to get familiarise and understand their requirements and demands.

    Improve on market in tell igence

    With the resources available Brandix should implement a market study to overcome the external factors that can

    affect sales and market share. Constantly being updated on market fluctuations will allow Brandix to take

    immediate action and turn threats in to opportunities. This will lead to sustain and maximise sales and market

    share of Brandix.

    Opportunities of acquisitions are the main reason for companies to enter into these deals. Acquisitions create synergies

    and economies of scale, expanding operations and cutting cost. Investors can take comfort in the idea that acquisitions

    will deliver enhanced market power.

    Word Count: 2082

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    Reference

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    Appendix 1

    Brandix Lanka Ltd

    Organisation

    Brandix Lanka Ltd is one of the largest exporters in the apparel industry in Sri Lanka and is supported by over 25manufacturing facilities nationwide, plus global sourcing offices.

    The company was established with a single manufacturing facility in Sri Lanka in 1972 as Lux Shirts (Pvt.) Ltd. And the

    company was re-launched with a new identity and a new name as Brandix Lanka Ltd in 2002. Now the company has

    22,000 employees supplying vertically integrated apparel solutions to the worlds fashion super brands (Victorias Secret

    Gap, Next, Marks and Spencer, Liz Claiborne, Abercrombie and Fitch etc.).

    Its vertical integration extends from fabric manufacturing, wet and dry finishing, to accessories such as thread, buttons

    and hangers. Our vision is to be the inspired solution for branded clothing and our values are Integrity, Teamwork

    Customer Service, Learning & Development, Ownership and Commitment.

    Products

    Brandix core product is apparel and all its other pursuits are to enhance its quality levels, and add value to the groupsproducts and services to benefit customers. Its many subsidiaries specialise in different types of apparel, textiles

    accessories, finishing and timmings. Brandix casualwear is the backbone of the groups product portfolio and its seven

    production facilities manufacture basic pants, cargo pants, five-pocket jeans, shorts and skirts.

    Market

    The market was proving to be challenging with an extensive oversupply of apparel and textiles around the world

    Adopting an unorthodox strategy, Brandix consolidated its customer base in the wake of the elimination of the Multi Fibre

    Agreement (MFA).

    Where other manufactures were broad-basing their client portfolio, Brandix adopted a narrow and deep approach, and

    implemented a converse strategy, focusing on its main customers. Providing a holistic model devised to integrate every

    aspect of fashion, from developing the design into a final branded product for the fashion store, has seen Brandix adopt a

    strategy of innovation to execution.

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    Brandix has gained the distinction of being the countrys largest apparel exporter by the export development board (EDB).

    The company had a turnover of over US$ 320 million in 2007 and has a plan to grow to $1 billion in revenue by 2010.

    The company positions itself to be a high-end garment manufacturer for the premium consumer markets with

    differentiated products of world renowned brands such as GAP, Next, Marks & Spencer and Victoria Secret. However i

    must also be noted that a strong distinguishing factor of Brandix Lanka Ltd is its adherence to its strong environmental

    policy of manufacturing environmentally friendly garments, which are produced in their Green Plants thus providing a

    competitive advantage by means of consumer preference in the growing environmentally conscious market.

    Achievements

    Brandix was presented the Presidential Award in recognition of its contribution to the national economy as the Highest

    Net Foreign-Exchange Earner in 2005 and the outstanding exporter of the Year award in the apparel Category 2005. In

    2007, the Export Development Board of Sri Lanka identified Brandix as Sri Lankas largest apparel exporter and won the

    Gold Award in the Apparel Sector etc.

    Key Challenges

    One of the key challenge is to ensure the use of the brand execution is consistent and in line with the brand strategy.

    Another challenge is to inspire our customers every day by being flexible to quick changes in style and trends while

    maintaining a high standard at a low price. So that we can provide our customers with more than just good customer

    service.

    Brand Values

    Brandix lives up to the epitome of an organisation which thrives on its values. The group is inherently dynamic, forward

    looking and optimistic, and believes in striving for excellence and upholding transparency at all times.

    An ethical employer, it upholds the integrity of its employees preserves the confidentiality of its customers and works in

    every possible way to create sustainability in its activities as well as for its stakeholders. In line with its commitment to

    the environment, Brandix has launched a Green plan in 2008 and will be imbued with the tenets of carbon neutralisation,

    waste and energy management, alternative energy options, cleaner technology initiatives and health and safety amongst a

    host of measures to ensure a completely green compliant organisation

    Future plans

    One of the companys future plans is to invest on environmental initiatives over the next few years. Eco-friendly

    manufacturing is the way of the future for Brandix Lanka Ltd.

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    Appendix 2

    Kuriwita Textile Mills PLC (KTM)

    History

    The KTM is a Sri Lankan based company began in 1981 and has steadily grown to become one of the manufactures for

    textile today.

    Vision and Mission of the Company

    To provide quality customer service through innovation, leadership and excellence and to be responsive to changes in a

    competitive environment.

    To instill professionalism by embracing a positive spirit of enterprise within the group, with the aim of increasing market

    share.

    Focus on design to provide meticulous, high quality products that are sought after by brand conscious customers Customer driven philosophy to guide the overall decision making process, behaviours and culture of the

    company in product design, packaging and delivery.

    A Brand-centric approach enabling the company to build powerful lifestyle brands that resonate with customersIslandwide and create synergistic effects.

    Entrepreneurial mindset to drive the workforce to deliver products with clear understanding of marketrequirements

    Product Range

    KTM offers a complete textile range to manufacture garments such as casual wear to jeans, sleepwear, lounge and sports

    ware encompassing all demographics, womens, mens and childrens.

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    Appendix 3

    DECLARATION

    I confirm that in forwarding this assessment for marketing, I understand and have applied the CIM policies relating to

    word count, plagiarism and collusion for all tasks. This assignment/project is the result of my own independent

    work/investigation except where otherwise stated. Other sources are acknowledged in the body of the text and/or a

    bibliography is appended. The work that I have submitted has not previously been accepted in substance for any other

    award and I further confirm that I have not shared my work with other candidates.