If you are running a tech business, which intangible asset is the most important, your technology, brand, data, or network of business relationships?
In the first instance, one might immediately perceive the technology to be of greatest importance, since it is the most basic aspect which the business is built upon. Yes, technology is important, but if you look deeper into your business operations, is it really the most important?
In this day and age of rapidly evolving technologies, how one prioritises and strategizes the use of intangible assets of a tech company could make or break the business.
A new technology that rolls out in the market brings about improvements in productivity, mobility, connectivity etc., and may disrupt the norm. Such developments often generate hype, resulting in the technology commanding a high initial value and importance to the business. However, in time, competition creeps in or the technology itself phases out to make way for new ones. Relying solely on developing new technologies to keep up is extremely onerous. A business which places sole emphasis on the technology will always be playing a catch-up game.
A new brand for technology, having limited reach or marketing efforts, is initially obscure. Nevertheless, as the technology penetrates the market, efforts in branding can leverage on the hype of the new technology to gather a consumer base and build brand character. Even if similar technologies flood the market, or if the technology evolves or phases out, brand loyalty, if it were to be established, could be the factor that sustains a steady stream of business. Branding becomes the differentiating factor between the competitors in the market. However, this can only happen if the company sees the need and invests in branding.
Take Apple as an example. Apple is a tech company in which its technology would be considered the most important to the business in the initial days. As time passes, Apple continued to build its technology, rolling out a range of products from Macintosh to Apple Watch, and services from App Store to Apple Pay. However, this move, while necessary to keep up with evolving technologies, is not simply about developing new technologies, products or services to satisfy consumer needs. Apple has leveraged on each product and service line to build and maintain a unique brand personality. Today, the Apple brand stands for lifestyle, simplicity, dreams and aspirations1 and has gathered a customer base that subscribes and supports Apple’s products because of its brand image. It can be seen that over the years, despite having an increasing number of competitors, Apple has managed to be one of the top S&P companies since 200923, and ranked as the most valuable brand since 20134.
Closer to home, Razer is a local tech company that has built a strong brand image as a leading lifestyle brand for gamers rather quickly. Established since 2005, Razer’s initial years focussed on gaming peripherals such as mouse and keyboard. These products and technologies, on their own, are unlikely to have made it to the global market. However, Razer has used their gaming peripherals as a base to invest effort in branding by successfully identifying and targeting their niche supporters and engaging them through social media. In fact, Razer has dominated various social media platforms to provide timely customer support, and in the process building a loyal fan base5. The confluence of its technology and branding has strengthened its market position, raising Razer’s potential to grow its business further. This has attracted the support and funding from investors such as Digital Grid of Hangzhou Liaison Interactive6. In 2017, with backing from Intel Capital, Singapore’s GIC and Li Ka-Shing, Razer’s stock rose 41% above its price of initial public offering in Hong Kong, raising S$721million7. The story does not stop here. Moving forward, Razer is continually evolving its technology and taking a step into Fintech with Razer Pay8. This move would likely serve as another base upon which Razer can build its branding upon and grow its flourishing business further.
Here we see the importance of using a strong brand image to maintain or even level-up a tech business. Apple and Razer are examples of businesses that have used the intertwining relationship between two forms of intangible assets. As one might know, intangible assets cover more than just one’s brand and technology. In fact, both examples above also hints of other intangible assets that contribute to their successful business (can you identify them?).
1 Marketing Minds, Apple’s Branding Strategy, (2016), http://www.marketingminds.com.au/apple_branding_strategy.html
2 Siblis Research, S&P 500 Historical Market Caps of Individual companies, 31 December 2019), http://siblisresearch.com/data/market-caps-sp-100-us/
3 Michael Johnston, Visual History of the S&P 500, (14 December 2012), https://etfdb.com/history-of-the-s-and-p-500/#2009
4 Interbrand, Best Global Brands Previous Years, (2013-2018), https://www.interbrand.com/best-brands/best-global-brands/previous-years/2013/
5 Dominque Jackson, Brand loyalty: The secret behind Razer’s 10 Million+ followers, https://inteqinsights.com/industry-news/brand-loyalty-the-secret-behind-razers-10-million-followers/
6 Ingrid Lunden, Razer raises at a $1.5B valuation, with $75M from China’s Digital Grid for immersive gaming, (23 February 2016), https://techcrunch.com/2016/02/22/razer-raises-at-a-1-5b-valuation-with-75m-from-chinas-digital-grid-for-immersive-gaming/
7 The Straits Times, Razer surges on debut after raising s$721m in HK IPO, (13 November 2017), https://www.straitstimes.com/business/companies-markets/razer-surges-on-debut-after-raising-s721m-in-hk-ipo
8 Razer Press, Razer Fintech Leads Consortium Bid for Digital Full Bank License in Singapore, (2 January 2020), https://bit.ly/39cXZsw
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