Friday, May 1, 2009

Corporate Nationality As a Branding Tool

Matt Yglesias on corporate nationality:

Beyond CEOs, Nestle has 15 directors. Of them one is Indian, one is Swiss/American, seven are Swiss, and the rest are from other European countries. But there’s nothing especially “European”—and certainly nothing Swiss—about the company’s actual operations. They earn a lot of money in Europe, but the majority of their revenue is from outside of Europe, and there’s production all over the world. It’s also totally normal for large multinational firms to be disproportionately owned by shareholders located in their “home country” and home continent.

Corporate nationality, in other words, doesn’t matter. But it seems as if it actually does. And for somewhat mysterious reasons.

One reason I can think of is that corporate nationality can and is used as a branding tool. There's probably some serious brand equity in Nestle being thought of as a Swiss company because Switzerland is know for its luxury brands and chocolate. And American companies practically flaunt their American-ness (at least here in America).

Image from here.

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