Entrepreneurship and the development of global brands

Business History Review

Volumn 81, Issue 4, 2007, Pages 651-680

  Lopes, Teresa Da Silva ^a   Casson, Mark ^b  

^a QUEEN MARY UNIVERSITY OF LONDON   (United Kingdom)

^b UNIVERSITY OF READING   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 41149106794     PISSN: 00076805     EISSN: None     Source Type: Journal    
DOI: 10.2307/25097419     Document Type: Review

References (157)

1. David A. Aaker and Erich Joachimsthaler, "The Lure of Global Branding," Harvard Business Review (Nov. 1999): 137-44.
2. In order to place a particular brand and the industry where it operates in this spectrum of alternatives, we can use a proxy: number of patents registered each year weighted by the size of the industry. See, for example, United States Patent and Trademark Office, Patent Counts by Class by Year, Jan. 1977-Dec. 31, 2001.
3. These brands' rankings in the world's top brands are listed by Interbrand in The 2006 Best Global Brands Report (2006).
4. Alfred Marshall, Principles of Economics, 8th ed. (London, 1927/1961), 544;
5. Joseph A. Schumpeter, The Theory of Economic Development: An Enquiry into Profits, Capital, Credit, Interest, and the Business Cycle (Cambridge, Mass., 1934);
6. Alfred D. Chandler Jr., Strategy and Structure (Cambridge, Mass., 1962), 284,
7. and Scale and Scope (Cambridge, Mass., 1990), 597, 830-31;
8. Mark Casson, "Entrepreneurship and the International Business System: Developing the Perspective of Schumpeter and the Austrian School," in Economics of International Business, ed. Mark Casson (Cheltenham, 2000),
9. and "Entrepreneurship and Business Culture," in Entrepreneurship, Networks and Modern Business, eds. Jonathan Brown and Mary B. Rose (Manchester, 1993);
10. George H. Evans Jr., "A Theory of Entrepreneurship," Journal of Economic History 2 (Dec. 1942): 142-46;
11. Youssef Cassis and Ioanna Pepelasis Minoglou, eds., Entrepreneurship in Theory and History (New York, 2005).
12. There are numerous definitions of entrepreneurs, each highlighting a distinct dimension of entrepreneurial behavior. The most prevalent ones focus on the entrepreneur's perception of new economic opportunities and his or her capacity to introduce and implement new ideas in the market. See, for example, the definition proposed by the Organisation for Economic and Co-operation and Development (OECD) in Fostering Entrepreneurship (Paris, 1998);
13. Mark Casson et al., The Oxford Handbook of Entrepreneurship (Oxford, 2006), ch. 1;
14. William B. Gartner and Nancy M. Carter, "Entrepreneurship Behaviour: Firm Organizing Processes," in The International Handbook of Entrepreneurship, eds. Zoltán J. Acs and David B. Audretsch (Dordrecht, 2003), 195-221;
15. Robert F. Herbert and Albert N. Link, "In Search of the Meaning of Entrepreneurship," Small Business Economics 1 (Mar. 1989): 39-49.
16. Mark Casson, The Entrepreneur: An Economic Theory (Oxford, 1982).
17. Joseph A. Schumpeter, "The Creative Response in Economic History," Journal of Economic History 7 (Nov. 1947): 149-59.
18. James G. March, "Exploration and Exploitation in Organizational Learning," Organization Science 2 (Feb. 1991): 71-87.
19. Nathan Rosenberg, Schumpeter and the Endogeneity of Technology: Some American Perspectives (London, 2000). In this book, Rosenberg points out that Schumpeter missed the importance of exploitation as a form of innovation that is best done in large organizations.
20. J. Panglaykim, "The Entrepreneur and Growth and Development Corporations," Asian Survey 19 (July 1979): 707-17.
21. For alternative definitions of brands, see Kevin Lane Keller, Strategic Brand Management (London, 1998), 4;
22. Leslie de Chernatony and Malcolm McDonald, Creating Powerful Brands (Oxford, 1998);
23. Leslie de Chernatony and Gil McWilliam, "The Varying Nature of Brands as Assets," International Journal of Advertising 8, no. 4 (1989): 339-49,
24. and "Brand Consultants' Perspectives and the Concept of the Brand," Marketing and Research Today 25, no.1 (1997): 45-52;
25. Géraldine Michel and Tim Ambler, "Establishing Brand Essence across Borders," Journal of Brand Management 6, no. 5 (1999): 333-45;
26. Kevin Lane Keller, "The Brand Report Card," Harvard Business Review (Jan.-Feb. 2000): 147-57;
27. Susannah Hart and John Murphy, Brands: The New Wealth Creators (London, 1998);
28. David A. Aaker, Building Strong Brands (New York, 1996);
29. Peter Doyle, "Building Successful Brands: The Strategic Options," Journal of Marketing Management 5, no. 11 (1989): 78.
30. Patrick Barwise and Thomas Robertson, "Brand Portfolios," European Management Journal 10, no. 3 (1992): 277-85.
31. David A. Aaker, "Dimensions of Brand Personality," Journal of Marketing Research 34, no. 3 (1997): 347-56.
32. However, car companies are increasingly investing in marketing campaigns that highlight intangible aspects of their products, creating associations of status or lifestyle.
33. The intangible characteristics of brands can either be functional and objective (such as quality, value for money, and consistency) or abstract and emotional (reflecting psychological and social values, such as the prestige associated with products from a certain region or country, and with heritage). See Leslie de Chernatony, Brand Management (Aldershot, 1998);
34. Leslie Chernatony and Francesca Dall'Olmo Riley, "Defining a Brand: Beyond the Literature with Experts' Interpretations," Journal of Marketing Management 14, no. 5 (1998): 417-43;
35. Stephen King, Developing New Brands (Bath, 1973).
36. For a discussion of technological developments, see, for example: for beer, Terry Gourvish and Richard G. Wilson, The British Brewing Industry, 1830-1980 (Cambridge, 1994);
37. for wines and spirits, John Cavanaugh and Frederick F. Clairmonte, Alcoholic Beverages: Dimensions of Corporate Power (London, 1985);
38. for food, Roy Church and Christine Clark, "Product Development of Branded Packaged Household Goods in Britain, 1870-1914: Colman's, Reckitt's and Lever Brothers," Enterprise and Society 2, no.3 (2001): 503-42;
39. for the beauty industry, Geoffrey Jones, "Globalizing the Beauty Business before 1980," Harvard Business School Working Paper H37406-056 (June 2006);
40. and for fashion, Regina Lee Blaszczyk, "Styling Synthetics: DuPont's Marketing of Fabrics and Fashions in Postwar America," Business History Review 80 (Autumn 2006): 485-528.
41. United Nations Conference on Trade and Development (UNCTAD) statistics show that a high proportion of outward foreign direct investment in consumer-goods industries is concentrated in a limited number of countries. World Investment Report (New York, 2002).
42. For a review of the literature on how the different determinants affect entrepreneurship, see Geoffrey Jones and Jonathan Zeitlin, eds., Oxford Handbook of Business History (Oxford, 2007).
43. See also Casson, "Entrepreneurship and Business Culture."
44. See, for instance, coverage of the case of alcoholic beverages by Teresa da Silva Lopes, Global Brands (New York, 2007).
45. This route of expansion has both advantages and disadvantages. On the one hand, firms may acquire large portfolios of complementary brands. On the other hand, problems of brand rationalization may arise when brands are acquired that compete with brands in firms' existing portfolios.
46. Johnson & Johnson and Colgate-Palmolive are also listed in this group of multinationals. Interbrand, Best Global Brands 2006: A Ranking by Brand by Value (2006).
47. One of those competitors was Jacobsen's son, Carl Jacobsen, who established a production unit in an annex of the J. C. Jacobsen plant in 1871, producing a beer branded as Ny Carlsberg. Carl's use of a similar brand name led J. C. Jacobsen to sue his son. Both breweries were united under the same ownership - a foundation - in 1902, after the death of both father and son. Kristof Glamann, Jacobsen of Carlsberg: Brewer and Philanthropist (Copenhagen, 1991), 216-17.
48. In 2005 Carlsberg sold 3.4 million hectoliters of beer in Denmark out of a total of 68.9 million hectoliters sold. Carlsberg, Annual Report and Accounts, 2005.
49. Glamann, Jacobsen of Carlsberg. For instance, Carlsberg had around 42 percent to 44 percent of the Danish market in the 1920s.
50. In 1968 it made its first investment in a foreign market by setting up brewing operations in Malawi, and in 1969 it created its first licensing agreement in Cyprus. An important step in its internationalization strategy was a joint venture launched with Grand Metropolitan in 1974 to sell Carlsberg in the United Kingdom, during a period when tastes were changing to lighter beers in that market. United Breweries Ltd., Annual Reports and Accounts, 1969-70, 1970-71, 1975-76.
51. This slogan was launched in the United Kingdom in 1975 using a voiceover by Orson Wells. United Breweries, Annual Report and Accounts, 1975-76.
52. Interview with Bjarre Maurer, Carlsberg Communications, Copenhagen 18 May 2001; United Breweries, Annual Reports and Accounts, 1969-70;
53. Carlsberg, Annual Report and Accounts, 2005.
54. Paola Trimarco, Gucci: Business in Fashion (London, 2001);
55. Gerard McKnight, Gucci: A House Divided (New York, 1987);
56. Sara G. Forden, The House of Gucci: A Sensational Story of Murder, Madness, Glamour, and Greed (New York, 2001).
57. "Don't Mix Your Designers," Economist, 14 Jan. 1999;
58. "Cockfight," Economist, 25 Mar. 1999;
59. "Premium Blend," Economist, 22 Oct. 2004.
60. Asahi Brewery, Annual Report and Accounts, 1988;
61. Tim Craig, "The Japanese Beer Wars: Initiating and Responding to Hyper-Competition in New Product Development," Organization Science 7, no. 3 (1996): 302-21.
62. Kirin, Annual Report and Accounts, 1966;
63. "Asahi Pushes Kirin out of Pole Position," Financial Times (21 Feb. 2002);
64. "Japan's Beer Wars," Economist, 26 Feb. 1998.
65. Henri Nestlé started producing infant formula in 1843 in Switzerland. He tried to sell to doctors, pharmacists, and hospitals, but mothers first started using his formula after there was evidence that it had saved a premature baby. In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company and throughout the 1920s and 1930s continued acquiring other companies. After World War II, Nestlé diversified first by creating an alliance with the chocolate producer Vevey, and subsequently by merging with this firm. In 1947 the firm merged with Maggi (a large Swiss multinational famous for its sauces and soups). This merger opened Nestlé's business to world markets. See Jean Heer, Nestlé: One Hundred Twenty Five Years (Vevey, 1991);
66. Roger Priouret, "Comment la Suisse acquit une industrie alimentaire de dimension mondiale," Le Figaro, 6 Sept. 1966;
67. "Global Confederation Where the Whip Is Seldom Cracked - Nestlé Alimentana S.A.," Financial Times, 16 July 1969.
68. Albert Pfiffner, "A Real Winner One Day: The Development of Nescafé in the 1930s," in Genuss und Nüchternheit: Geschichte des Kaffees in der Schweiz vom 18, ed. Roman Rossfeld (Baden, 2002).
69. "Rapport au Conseil d'Administration, Séance du 10 Juin 1928 à Cham," Nestlé Historical Archive.
70. Heer, Nestlé.
71. Letter from E. Muller (vice president of Nestlé) to J. W. Gwynn (managing director of N.M.P. Ltd.), 15 Apr. 1937; Nestlé Historical Archive.
72. Letter from E. Muller to H. Kuhlmann, Rio de Janeiro, 18 Mar. 1937, SG 11 541, Nestlé Historical Archive.
73. M. Morgenthaler, "La Naissance du Nescafé," Bulletin Nestlé no. 2 (1944);
74. "Cinquante ans de Nescafé!" Nestlé Gazette (Apr. 1988).
75. "Rapport au Conseil d'Administration, Séance du 10 Juin 1938 à Cham," Nestlé Archive; "Roasters Turn to Soluble Coffee Business: Roasters Caught in Prize Squeeze Find Solubles a Possible Solution," Tea and Coffee Trade (Mar. 1953);
76. "Soluble Coffee: What Caused Phenomenal Sales Increases?" Tea and Coffee Trade (May 1953).
77. "Chairman's Reports on York to General Board, 1933-1935," R/B/2/2, Rowntree Archive, Borthwick Library.
78. "Notes by WW on the Achievement of the Business in 1932 in sales and profits, and the factors contributing," R/B4/WW/1, Rowntree Archive.
79. The brand KitKat was first registered by Rowntree in 1911 and subsequently renewed in different periods (1925, 1939, 1953, 1967). "Register relating to applications for the Registration of Trademarks," R/DP/F/19, Rowntree Archive.
80. Correspondence regarding Rowntree-Nestlé USA negotiations, "Letter from C. W. Gilderdale to L. Owen and J. D. Watson," 14 July 1934, Rowntree Archive.
81. Other brands launched in this period were Aero, Smarties, and Black Magic chocolates. Robert Fitzgerald, Rowntree and the Marketing Revolution, 1862-1969 (Cambridge, 1995).
82. "File with Information about Overseas and Exports Division," R/DH/SC/16, Rowntree Archive.
83. Letter from 1952 regarding the retirement of G. J. Harris, R/B3/LO/1, Rowntree Archive.
84. Letter from Donald Barron (chairman of Rowntree) to the shareholders of Mackintosh announcing the merger (22 May 1969), R/BJ/BJB/4, Rowntree Archive; "Rowntree and Company and John Mackintosh and Sons Limited - Press Release," 2 Apr. 1969, R/B2/5, Rowntree Archive.
85. "Rowntree and Company and John Mackintosh and Sons Limited - Press Release," 2 Apr. 1969, Rowntree Archive;
86. D. Thomas, "How Rowntree Matched Macintosh," Management Today (Sept. 1970): 102-56;
87. T. A. B. Corley, "Best Practice Marketing Food and Health Drinks in Britain, 1930-70," in Adding Value: Brands and Marketing in Food and Drink, eds. Geoffrey Jones and Nicholas J. Morgan (London, 1994).
88. "The Nestlé Takeover of Rowntree," Inquiry into Corporate Takeovers in the United Kingdom (Edinburgh, 1991).
89. Heer, Nestlé, 449-57 ;
90. "Nestlé Offers £2.1 Billion for Rowntree," Herald Tribune, 27 Apr. 1988.
91. Anheuser Busch, Annual Report and Accounts, 2005;
92. "Modelo Sharpens Overseas Focus and it Rides Bumpy Road in the U.S.," Impact, 15 Nov. 2005.
93. International Accounting Standards (Rochester, 1996).
94. Howard Schultz and Dori Jones Yang, Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time (New York, 1997);
95. "Howard Schultz and Starbucks Coffee Company," in Nancy F. Koehn, Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell (Cambridge, Mass., 2001).
96. Douglas A Simmons, Schweppes: The First Two Hundred Years (Ascott, 1983);
97. Gilles de Bure, Perrier by Perrier (Barcelona, 2001);
98. "Chantée par Valéry," L'Éxpress, 28 June 1965;
99. "De l'eau minérale au conditionnement: Le groupe Perrier a realisé sa proper verrerie à Vergèze," Les Echos, 15 May 1974.
100. "Perrier: Soif d'OPE," Le Figaro: Économie, 6 Mar. 1989.
101. Business Trend Analysis, "The Bottled Water Market," 1986.
102. "Competition Stiffens for Perrier," Herald Tribune, 1 Nov. 1988.
103. The European Commission ruled that the company should dispose of Volvic. Volvic was then acquired by the French group BSN, which already had Évian and Badoit. "Bruxelles joue les sourciers avec Perrier," La Croix L'Événement, 24 July 1992;
104. "Perrier devra vivre sans le flair de Gustave Leven," La Tribune de L'Expansion, 2 July 1990.
105. "Le Français est Buveur d'Eau," L'Express, 31 Mar. 1960;
106. "Le Revanche des Buveurs d'Eau," Le Nouvel Observateur, 23 Nov. 1989.
107. "Les Sociétés d'Eaux Minerals et la Bourse," Les Echos, 21 May 1969;
108. "La Bataille de l'Eau Minérale," Journal des Finances, 7 Apr. 1989.
109. In 1970, as part of its diversification strategy into the production of the contents of bottles, BSN also acquired two breweries: Kronenbourg and the European Breweries Company. Business Trend Analysis, "The Bottled Water Market," 1986;
110. Bankers Trust, "Bottled Water: Pan European - Food Producers," 1999.
111. "Eaux Minerals: La Crise du Pétrole Grignote les Profits et les Consommateurs Contestent l'Utilité des Produits Nouveaux," Les Echos, 6 Sept. 1974;
112. "Evian: La bouteille compactable pour faire la différence, " La Tribune, 1 Feb. 1995.
113. KeyNote, "Bottled Water: Market Assessment," 2005.
114. Randall Bruce Monsen, A Century of Perfume: The Perfumes of François Coty (Atlanta, 2001).
115. Hubert Bonin, Carole Pailhé, and Nadine Polakowski, "The French Touch: International Beauty and Health Care at L'Oréal (since 1907)," in Transnational Companies, eds. Hubert Bonin et al. (Paris, 2001);
116. François Dalle, L'Aventure L'Oréal (Paris, 2001);
117. Geoffrey Jones et al., "L'Oréal and the Globalization of American Beauty," Harvard Business School Case 805-086 (Boston, 2005).
118. The different channels of distribution corresponded both to distinct economic levels and to different purchasing habits. Jones et al., "L'Oréal and the Globalization of American Beauty."
119. Helena Rubinstein, My Life for Beauty (New York, 1966);
120. Patrick O'Higgins, Madame: An Intimate Biography of Helena Rubinstein (New York, 1971).
121. Lindy Woodhead, War Paint: Madame Helena Rubinstein and Miss Elizabeth Arden: Their Lives, Their Times, Their Rivalry (Chichester, 2004);
122. Kathy Peiss, Hope in a Jar: The Making of America's Beauty Culture (Kinlough, 1999).
123. In the 1960s, only 3 percent of its volume of sales was in foreign markets. In 2000 over 50 percent of its sales occurred outside Europe. L'Oréal's transformation of local brands into global brands had two stages that took about ten years overall: during the first stage, brands were chosen that had the potential to become global. To progress to the next stage, the brand had to sell to a critical mass. "Comment L'Oréal Mondialise," Le Figaro: Économie, 29 Oct. 2001.
124. Interview with Jean-Claude Le Grand, Marketing Manager for L'Oréal, Paris, 10 June 2002;
125. "Béatrice Dautresme: La potion magique d'Helena Rubinstein," Le Figaro, 2 Nov. 1999.
126. "Introducing Cadbury Schweppes, 1969," Cadbury Archive; J. A. Williams, The Firm of Cadbury, 1831-1931 (London, 1931), 5-40.
127. Geoffrey Jones, "Multinational Chocolate: Cadbury Overseas, 1918-1939," Business History 26, no.1 (1984): 59-76.
128. "Talk Given by Sir Egbert Cadbury" (South Africa, 1965), Cadbury Archive; Williams, The Firm of Cadbury.
129. "Schweppes Plus Cadbury," Times, 30 Jan. 1969;
130. Derek F. Channon, The Strategy and Structure of British Enterprise (London, 1973);
131. Corley, "Best Practice Marketing of Food and Health Drinks in Britain, 1930-70";
132. G. Foster, "The Cadbury Schweppes Mix," Management Today (Apr. 1970): 64-73.
133. Interview with Chris Searle, Global Marketing Manager for Bombay-Bacardi and former brand manager at International Distillers and Vintners, London, 22 Jan. 2004.
134. Interview with Jack Keenan, former CEO of Diageo, London, 31 Oct. 2003.
135. The two brands were acquired by Bacardi for £1.15 billion (US$1.9 billion) in 1998.
136. Interview with Chris Searle, global marketing manager for Bombay Sapphire, Bacardi, London, 22 Jan. 2004.
137. M. Shaken Communications, Inc., Impact International: Databank (New York, 2006).
138. Geoffrey Jones, Renewing Unilever: Transformation and Tradition (Oxford, 2005).
139. Davis Dyer, Frederick Dalzell, and Rowena Olegario, Rising Tide: Lessons from 165 years of Brand Building at Procter & Gamble (Cambridge, Mass., 2004);
140. "Alan Lafley: Procter & Gamble veut grandir dans les cosmétiques et les parfums," Les Echos, 8 Jan. 2003.
141. "JPMW/IS," Sept. 1984, and "The New Group - Moët Hennessy," 1971, both at Moët Hennessy Archives, Epernay;
142. Moët Hennessy, Annual Report and Accounts, 1970-71.
143. "LVMH Drinks to New Shareholders," Financial Times, 11 July 1988;
144. "France's Old Managerial Order Is Changing - A Disputed Touch of Class," Financial Times, 7 Aug. 1988;
145. Moët Hennessy, Annual Report and Accounts, 1989.
146. Smirnoff was created in 1864 in Russia and was drunk by the royal family. In 1933 a former U.S. supplier of the brand bought the American rights to produce it. In 1939 Heublein, a U.S. firm that had become the leading multinational in the world by the mid-1980s, bought the brand. In 1987 Heublein was in financial difficulty and was less and less able to invest in the brand. Grand Metropolitan, which had the right to distribute Smirnoff in Europe, saw its potential to become a global brand. After Grand Metropolitan merged with Guinness to form Diageo, it acquired Heublein in 1997. Thus it came into the hands of the world's largest multinational. Smirnoff is now part of a limited number of global priority brands from which Diageo derives most of its economic profit in several countries. Lopes, Global Brands.
147. Moscow Mule was first created in 1941; "Moscow Mule File," Smirnoff Archive, Diageo, Menstrie, U.K.
148. Interview with Chris Nadin, former marketing manager at Grand Metropolitan, London, 10 Dec. 2003.
149. Barwise and Robertson, "Brand Portfolios," 278;
150. David A. Aaker and Kevin Lane Keller, "Consumer Evaluations of Brand Extensions," Journal of Marketing 54 (Jan. 1990): 27-41.
151. David J. Storey, "Firm Performance and Size: Explanations from Small Firm Sectors," Small Business 1, no. 3 (1989): 175-80.
152. Explicit knowledge (articulated or codified) can be transferred by way of a systematized language or code, and there is no need to link it to a specific context for it to be meaningful. Michael Polany, The Tacit Dimension (London, 1966);
153. Ikujiro Nonaka and Hirotaka Takeuchi, The Knowledge-Creating Company (New York, 1995);
154. Ikujiro Nonaka and Noboru Konno, "The Concept of 'Ba': Building a Foundation for Knowledge Creation," California Management Review 40 (Spring 1998): 40-54.
155. Schumpeter, "The Creative Response."
156. This view contrasts with that of Schumpeter, who considers the entrepreneur to be the one who initiates economic change and thinks that consumers are taught to want new things. Schumpeter, The Theory of Economic Development, 65-94.
157. See for example Raymon Vernon, "International Investment and International Trade in Product Cycle," Quarterly Journal of Economics 80 (May 1966): 190-207.