Brand equity and competitive advantage

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The foregoing chapters have set out a series of observations based on the literature review. They have probed a new area of management thinking centred on the concept of brand and the alignment thereof internally in the organisation. This is performed in a manner that encapsulates strategic intent and derives competitive advantage for the organisation, whether in the form of organisational culture enhancement, through to the manifestation of sustainable business results. Inherent in the concept of internal branding as a catalyst for competitive advantage lies a number of issues that need to be examined in the formulation of new theory development. Issues such as the nature of the organisation, the adoption and understanding of the concept of brand, the definition of departmental roles within the organisation and the extent to which brands are internally aligned with their external market expression are some of the elements that need investigation and analysis in the development of a model and theory advancement, both academically and in practice.
The research problem therefore centres on the investigation of the phenomenon of a brand-led approach to corporate strategy, involving a high degree of executive integration and a strong alignment of brand philosophy within the organisation, in support of the external messaging and offering and the operational performance of the business, ultimately deriving competitive advantage.

Research objectives

The research objective is to develop a model that aligns brand behaviour throughout the organisation in a manner that drives competitive advantage. This organisational phenomenon will be influenced by a range of elements which will be tested for relevance and validity in the course of the process in organisations that achieve a high degree of brand alignment and use brand as a primary source of competitive advantage, as well as in those who do not and those who use a contrasting approach.
The primary research question of the study was therefore:
How do companies achieve brand alignment to optimise business performance and obtain competitive advantage?
Secondary research questions linked to this were:
How do organisations ensure synergy between brand and the corporate strategy?
How do organisations ensure that the internal brand is synchronised with the external brand?
What methods and approach will enable the alignment of internal and external brands and the achievement of the strategy?
Why should existing brand equity theory and practice incorporate the brand alignment measure?
An assessment of the above will allow for the extraction of new ideas through theory triangulation and an innovative approach to the development of new theory in this area, with the formation of appropriate management models.

Research design

The nature of the research problem lends itself to a dynamic and innovative approach to the research design required to explore this phenomenon. Given that it essentially constitutes new theory development and probes an area in which little academic research has been directly targeted, this research project requires an approach that is especially appropriate in new topic areas and may result in theory which is novel, testable, relevant and empirically valid. In the fundamental comparison between a quantitative or qualitative study, the latter is selected on the basis that the research is not narrow and confined to a specific, repetitive topic, but rather one with a focus on the context of discovery rather than justification. Yin (2003:2) suggests that qualitative methods assist researchers who seek to understand complex social phenomena.
This implies the use of different methods to harness richer and deeper understanding of the area under consideration, combining observations from prior literature, insights from new investigative work, common sense and experience (Eisenhardt, 1989:532). She argues that it is the intimate connection with empirical reality that gives rise to and permits the development of testable, relevant and valid theory. Grounded theory as it was defined is an inductive, theory discovery methodology that allows the researcher to develop a theoretical account of the general features of a topic, while simultaneously grounding the account in empirical observations or data. Grounded theory is thus not intended to be used for theory or proposition testing, but for theory development (Eisenhardt,1989:548). Further detail on this approach follows in the ensuing sections of this chapter.

Research methodology

Corner (1991:719) suggests that quantitative methods are most commonly represented by experimental research designs, where casual relationships between variables are examined, controlled or removed from the natural setting and observations are quantified and analysed in order to determine statistical probabilities and the certainty of a particular outcome. Qualitative methods, Corner (ibid.) suggests, seek to examine phenomena in context, generating theory from the actor’s perspective, and accept and even encourage study designs where the researcher and subject are part of a two-way process in which understanding develops in the development of theory.
While there remains considerable and robust debate on the merits and demerits of either a quantitative approach or a qualitative one, such debate falls outside the ambit of this research method motivation. Suffice to say that whilst the literature often focuses on the relative incompatibility and differences of these approaches, the author chooses to focus on the specific value of particular research techniques.
Corner (1991:719) suggests that quantitative methods represent the logical positivist approach to research, whereas qualitative methods take the phenomenological or ethnographic approach. The latter has been adopted in this research project owing to its exploratory nature. Whereas a quantitative study concludes with confirmation or disconfirmation of the hypotheses that are tested, a qualitative study may finish with tentative answers or a hypothesis about what was observed.
Miles and Huberman (1994:6) offer some recurring features of the latter ‘naturalist’ research approach:
Qualitative research is conducted through intense or prolonged contact with a field or life situation.
The researcher’s role is to gain a holistic overview of the context under study.
The researcher attempts to capture data on the perceptions of local actors from the inside.
The researcher is essentially the main measurement device in the study.
Most analysis is performed in words.
The author has noted that quantitative researchers lean toward few variables with many cases, while qualitative research appears to deal with few cases and many variables. Given that this research study is essentially one of theory building and that it launches from the perspective that there is no cohesive theory under consideration, nor hypotheses to test, a qualitative approach to this research project has been adopted.

Qualitative research

Burns and Grove (1987:36) illustrate the discussion with a comparative table of quantitative and qualitative characteristics, summarised in Table 3.1.
In underpinning her motivation for a qualitative approach in certain situations, Corner (1991:719) offers the premise that quantitative research methods make an epistemological assumption that the social world lends itself to objective forms of measurement. However, stripping data from its natural context poses questions about the reliability of findings, since random or serendipitous occurrences are assumed not to happen. She contrasts this (1991:720) with the fact that qualitative approaches are felt to be concerned with understanding human behaviour from the actor’s own frame of reference.
Mangen (1999:109) asserts that the qualitative approach, when theoretically informed, is the most open-ended, flexible, exploratory means of formulating hypotheses for further structured analysis. He further postulates the need to locate phenomena in a dynamic societal context and, in particular, how endogenous and exogenous variables may interact.
Qualitative research is not merely non–numerical. The heart of its defence lies in its ability to penetrate the experiential and real social worlds of intentional, self–directing actors, through both the spoken and written word. Mangen (1999:110) builds on the work of Strauss and Corbin (1990) in their advance of the primacy of the individuals’ narrative accounts for the grounding of theory – in its focus on social process, it is the person’s own account that matters, according to them. Mangen (1999:110) also defends his view by citing Coffey and Atkinson (1996) regarding the use of the term of ‘culture of fragmentation’ that is characteristic of analyses derived from heavily pre-coded and categorised data.
Miles and Huberman (1994:8) list three approaches to qualitative research that principally support the above views:
Researchers are no more detached from their objects of study than are their participants. They argue that researchers have their own understandings, their own convictions; their own conceptual orientations and that they too are members of a particular culture at a given point in time. Pre–established instrumentation is necessary to separate the external information from what they themselves have contributed, when encoding and decoding the words of their respondents.
Social anthropology
This involves extended contact with a defined community with particular attention paid to the description of local peculiarities, the focus on individual perspectives and interpretation of their world, with relatively little pre-structured instrumentation, but often with a wider use of audio and videotapes, film and structured observation, than in other forms of research.
Collaborative social research
This approach involves collective action taken in a social setting, where the researchers design the outlines of a field experiment. This is accompanied by a process of reflexivity where the research remains in a questioning or asking stance, or dialectics, where the researcher and local actors may hold opposing interpretations of the data. Action research has been an outcome of this approach as a general strategy for institutional change.
An interpretivist approach is proposed for this research project, based on the rationale presented thus far and further supported by the findings of Lacity and Janson (1994:148) who argue that interpretivist approaches are concerned with the contextual circumstances that influence the process. The caveat they express is naturally that researchers must understand their own cultural filters and biases.
Interpretivists reject the notion that frequency is an indicant of importance and their validity checks are largely based on the acceptance of the scientific community – if they find meaning in the research, it is deemed valid and worthwhile (Lacity and Janson 1994:149). This study has therefore utilised a qualitative, interpretivist approach to explore the possibilities of new theory development through the case research approach, which methodology is now examined in more detail.

Case research methodology

The term case research is used to distinguish it from the popular description of case studies, as synthesised by Perry (2001:305). Case research is described as:
An investigation of a contemporary, dynamic phenomenon and its emerging, rather than paradigmatic, body of knowledge (Eisenhardt 1989; Yin 2003)
When the explanation of causal links are too complex for survey or experimental methods (Eisenhardt 1989; Yin 2003)
Using interviews, observation and other multiple sources of data (Perry 2001:305)
A phenomenon of some sort occurring in a bounded context (Miles and Huberman 1994:10).
Yin (2003) suggests that many cases have sub–cases within them and suggests that the case study is preferred in examining contemporary events, when the relevant behaviours cannot be manipulated. Yin (2003:13) supports the above views, concluding that case research is especially appropriate in situations where:
there is a contemporary phenomenon within its dynamically changing, real-life context;
the boundaries between the phenomenon and its context are not clear-cut; and multiple sources of evidence are used.
The phenomena under study in this research project meet with the above criteria. The notion of brand alignment is a highly contemporary issue, taking place in a dynamic and current business context. A real-life context is offered through the cases selected and the boundaries between the phenomenon and its context are opaque. Multiple sources of evidence are considered in the study.
Perry (2001:306) suggests that in social science phenomena there are few direct A to B causal links, because any links are strongly influenced by the context. Case research is thus explanatory, theory-building research, which incorporates and explains ideas from outside the situation of the cases. It is well suited to addressing a ‘how and why’ research problem (Yin 2003:9) and thus suits this research project.
Eisenhardt (1989:533) posits an 8-step process of building theory from case study research and she suggests that it is an especially appropriate approach in new topic areas, with the resultant theory often being novel, testable and empirically valid. The process comprehensively covers the basis for getting started, case selection, crafting instruments and protocols, entering the field, analysing data, shaping hypotheses, enfolding literature and reaching closure. Yin (2003:21) maintains that the following five components of research design in case research are especially important:
a study’s questions
its propositions, if any
its unit(s) of analysis
the logic linking the data to the propositions
the criteria for interpreting the findings.
This research project has studied the phenomenon of brand alignment as an emerging concept in business that is not yet fully identified, conceptualised and adopted. Thus, the case is the phenomenon observed at an individual business level, with openness to sub–cases that may have emerged with details of particular manifestations of the phenomenon. The outcome of the research is a model that:
articulates this phenomenon in a theoretical context
extends the application of theory to understand the key concepts
clarifies the relationships between the concepts
enhances current theory and management practice.
In order to achieve this intended outcome, certain research questions and constructs were considered and these are now examined.

Definition of research questions and constructs

Perry (2001:308) suggests that research theory views range from almost pure induction through to almost pure deduction. This research project is inductive in nature and follows a flexible process as described by Eisenhardt (1989:532) in which the research project is commenced as close as possible to the inductive ideal of no theory under consideration and no hypothesis to test, allowing the literature to enfold around the data while it is being collected and analysed.
Miles and Huberman (1994:17) suggest that any researcher, no matter how unstructured or inductive his/her views, arrives in fieldwork with some orienting ideas. At the commencement of this research project, something is known about the emerging brand alignment phenomenon, but not enough to forward a valid and reliable theory or model. The organisational architecture model as developed by Venter (2006:431) [q.v. Chapter 2, Figure 2.1] is considered as a framework for an approach to the brand alignment construct.
Yin (2003:14) strongly supports the middle ground of the induction to deduction spectrum, placing case research in the theory confirming and/or disconfirming territory. This suggests that a tight structure is set up before interviews are begun, with the posing of clear questions and the use of theories and reviews of previous research to develop hypotheses and rival hypotheses and the collection of empirical data to test such hypotheses. The use of the organisational architecture model (Venter 2006:431) has been contextualised against a sizeable body of existing theory as reported in the preceding chapters and has ensured a tightness to the questioning and approach to the development of instruments and the data collection and analysis process. Yin (2003:33) posits that the use of theory when conducting case studies is not only an immense aid in defining the appropriate research design and data collection, but also becomes the main vehicle for generalising the results of the case study.
As suggested by Yin (2003:15) and Miles and Huberman (1994:17), the research project tends toward the more structured end of the extremes of a loose, inductive approach and a tight pre-structured design. The research framework forms the basis of the conceptual framework for the dissertation and study direction.
The research aims to answer the question of how and why organisations align their internal operations, culture and people with their external brand promise in order to establish competitive advantage and create shareholder value. It questions the ‘how and why’ of brand alignment to optimise business performance and obtain competitive advantage as a primary question and a number of secondary questions in support of this. First, there is the matter of how organisations ensure synergy between brand and business strategy. Second is the question of how organisations should ensure the synchronisation between the internal and external brand and why some fail to do so. Further, it probes the methods and approach that will enable alignment. Finally, it considers how and why brand equity theory and practice should evolve in line with this.
According to Cooper and Schindler (1998:37), a construct is an image or idea specifically invented for a given research and/or theory-building purpose. The constructs within this research project are brand alignment, employer branding, reputation management, corporate branding, internal branding, corporate culture, organisational behaviour, strategic intent and sustainable competitive advantage.
Brand alignment, in the view of the author, is the concept of integrating organisational behaviour, culture, structure, systems and processes in a fashion that delivers external organisational image and reputation as an embodiment of the overall business strategy, and gives rise to value creation through brand equity and competitive advantage, which is not easily replicated.

1.1 Background
1.2 Theoretical foundation of the thesis
1.3 Research objectives and questions
1.4 Research approach
1.5 Delimitations of the study
1.6 Ethics
1.7 Limitations
1.8 Chapter overviews
2.1 Introduction
2.2 External branding
2.3 Internal marketing
2.4 Internal branding
2.5 Brand alignment
2.6 Brand equity and competitive advantage
2.7 Competitive advantage and brand alignment
2.8 Conclusion
3.1 Introduction
3.2 Research objectives
3.3 Research design
3.4 Limitations of the study
3.5 Reliability and validity
3.6 Ethical considerations
3.7 Conclusion
4.1 Background
4.2 Brand context
4.3 Brand influence
4.4 Internal to external
4.5 Structural
4.6 Impact
4.7 Conclusion
5.1 Background
5.2 Brand context
5.3 Brand influence
5.4 Internal to external
5.5 Structural
5.6 Impact
5.7 Conclusion
6.1 Background
6.2 Brand context
6.3 Brand influence
6.4 Internal to external
6.5 Structural
6.6 Impact
6.7 Conclusion
7.1 Background
7.2 Brand context
7.3 Brand influence
7.4 Internal to external
7.5 Structural
7.6 Impact
7.7 Conclusion
8.1 Introduction
8.2 Overview
8.3 Comparisons across the cases
8.4 Conclusion
9.1 Introduction
9.2 Research objectives
9.3 Research implications
9.4 Managerial implications
9.5 Limitations and further research

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