{"id":9755,"date":"2023-02-27T09:59:00","date_gmt":"2023-02-27T07:59:00","guid":{"rendered":"https:\/\/escp.eu\/thechoice\/?p=9755"},"modified":"2023-02-27T19:36:19","modified_gmt":"2023-02-27T17:36:19","slug":"4-strategies-for-brands-to-deal-with-geopolitical-crises","status":"publish","type":"post","link":"https:\/\/escp.eu\/thechoice\/choose-to-lead\/4-strategies-for-brands-to-deal-with-geopolitical-crises\/","title":{"rendered":"4 strategies for brands to deal with geopolitical crises"},"content":{"rendered":"\n

As consumers are increasingly asking for brands to take a stance on societal issues, managers need to decide how to react when a geopolitical crisis like the war between Russia and Ukraine arises. <\/em>Considering the financial and political risks on the one hand and the reputational and branding risks on the other hand, brands can face a dilemma in response to which Laetitia Mimoun offers different possible strategies. <\/em><\/em><\/p>\n\n\n\n

Why brands<\/strong> <\/strong>are <\/strong>increasingly taking a stance in geopolitical crises<\/strong><\/strong><\/h4>\n\n\n\n

It\u2019s not new to think of brands as geopolitical actors disseminating ideologies that advance the interests of their country of origin. For instance, many have criticised global U.S. brands such as Coca-Cola and McDonald\u2019s for supporting the \u201cAmericanisation\u201d of the world and spreading U.S. imperialism. Yet, in the last decade, brands have taken a more explicit role as geopolitical actors.<\/strong><\/p>\n\n\n\n

My colleagues Olivier Sibai, Achilleas Boukis and I extensively<\/a> studied \u2018brand activism,\u2019 previously defined<\/a> as a strategy that requires brands to position themselves as \u201cmoral actors promoting social, legal, business, economic, political, and environmental reform through their communication and practice<\/a>.\u201d With <\/a>nearly two-thirds of consumers expecting brands to work to improve the state of society<\/a>, even mainstream brands now have to show some degree of activism.<\/mark>

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Source: <\/strong>From me to we: The rise of the purpose-led brand. Accenture, 2018.<\/figcaption><\/figure>\n\n\n\n

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The dilemma for brands is to design strategies delineating the type and scope of issues on which to take a st<\/strong>ance,<\/strong> and the extent of their involvement in societal issues.<\/strong> This is usually carefully planned over time to balance many diverging interests from consumer to profitability pressures.<\/p>\n\n\n\n

Yet, when a geopolitical crisis arises, such as the war between Russia and Ukraine, brands are suddenly under the heightened attention of media and public opinion. Their careful strategies are disrupted and they must choose quickly what to do. <\/strong><\/strong><\/p>\n\n\n\n

How have brands reacted to <\/strong>Russia\u2019s invasion of Ukraine<\/strong>? <\/strong><\/strong><\/h4>\n\n\n\n

This is what I looked at in the impact paper I wrote<\/a> as part of ESCP Business School\u2019s \u201cGeopolitics and Global Business Impact\u201d series<\/a>. The war has yet to subside causing a growing death toll, over 8 million refugees<\/a>, and extensive material damage.<\/p>\n\n\n\n

With the escalation of the conflict, Western consumers started putting pressure on brands to take a stance. <\/strong>By mid-March, European and U.S. news media<\/a> had built a public opinion consensus that brands must cut all ties with Russia. By early June, almost 1,000 companies<\/a> had decreased or ceased operations in Russia.<\/p>\n\n\n\n

Brands\u2019 reactions differed:<\/strong><\/p>\n\n\n\n