Competition Is Growing Stronger
In 2016, it is more difficult for a company to ensure its spot on the 100 most reputable companies across the globe. The average RepTrak® Pulse of the 100 most reputable global companies has increased by 1.1 point since 2015 and 1.7 point since 2014. This indicates that a company can no longer only maintain a strong reputation, but must constantly strive to improve it and stay ahead of the competition.
This trend is even more visible when broken down to the 15 markets (Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, South Korea, Spain, U.K. and U.S.). Out of the 100 companies that make the list, only 6 are in the top 10 across the majority of the markets. Rolex, the top company overall, ranks in the top 10 across 11 markets, the most out of all companies. Sony, Google, The Walt Disney Company, Samsung and LEGO Group also ranked in the top 10 in a majority of markets. Only Google is perceived as one of the top reputable companies across all four main geographical regions: North America, EMEA, Latin America and Asia. When comparing the regions, it is more difficult to break into the top 10 in North America and EMEA than in Latin America and Asia.
Top Companies
With such strong competition, what makes the most reputable companies stand out? In 2016, three companies top the reputation list: Rolex, The Walt Disney Company and Google. The three companies have very close strong scores: 78.4 for Rolex, 78.2 for Disney and 78.1 for Google. To have the best reputation in the world, you need to have high levels of trust with consumers across all 15 markets we studied. To earn the trust and respect of consumers, companies need to deliver on a variety of expectations: from high-quality products, to open communication, to having a strong vision for the future and caring about your employees. Rolex, Disney and Google have been able to build a reputation platform across all seven dimensions of reputation. They have achieved this consistently throughout the past few years. In addition to their individual strong scores across all dimensions, Rolex, Disney and Google are overall leaders across dimensions. For instance, Rolex ranks first when it comes to products and services, Google tops workplace and performance, and Disney tops the governance and citizenship dimensions.
Products and Services Continues to Be the Top Driver of Reputation
In 2016, the key drivers of reputation are products and services, governance and innovation. For the past three years, the key drivers have remained consistent. Following the 2008 financial crisis, the general public started assigning more weight to the Corporate Social Responsibility (CSR) dimensions, which are governance, citizenship and workplace. As reputable companies have been regaining consumers’ trust, CSR dimension scores have been improving, and their weighted importance has grown. In a state of stability, the general public returns their focus on products and services and innovation. Still, governance remains as the second most important dimension. These key drivers of reputation vary across countries.
Lack of Corporate Narrative
Even the 100 most visible and well- known companies are struggling to get their message across to consumers. The majority of the general public is aware of the company’s product, but when the focus is on the enterprise there are a lot of question marks. Specifically, 58% of the general public is uncertain as to what these companies are doing when it comes to workplace and citizenship, and 54% are uncertain of companies’ activities in governance. These stakeholders are fence-sitters who can swing either positively or negatively depending on the information that companies share. Companies that are able to communicate and engage across the seven dimensions with consumers via their company story will see a massive improvement in recommendations and willingness to buy their product.
Support Is Strong for Companies with Strong Reputations
One of the main values of the RepTrak® model is that it connects reputation to business outcomes. When it comes to supportive behaviors such as willingness to buy products, recommending company or trusting company in a time of crisis, only companies with a strong RepTrak® Pulse range (70-79) achieve support above 50%. This support would rise to 80% for a company with an excellent score (>80), but no company achieved an excellent score in 2016.
Decline of Volkswagen and Impact on Auto Industry
Amid the recent diesel emission scandal, Volkswagen’s reputation dropped by
13.7 points across the globe. This drop resulted in Volkswagen going from number 14 in the 2015 Global RepTrak® 100, to number 123 in 2016 with an average score of 61.3. The biggest decline was a 17-point drop in the governance dimension. Citizenship saw a 15-point drop and leadership saw an 11-point drop. Consequently, with the decline of its reputation, Volkswagen experienced a drop across all supportive behaviors.
How did Volkswagen’s crisis impact the reputation of the auto industry? 2016 data shows that while the overall industry average dropped by 2 points, the reputation of other individual automakers was not affected.
This article is a summary of the 2016 Global RepTrak® findings. Reputation Institute is the world’s leading research and advisory firm for reputation, providing global companies the single-best way to measure, communicate and manage reputation performance. With this insight, companies can protect their reputations, analyse risks and drive competitive advantage. The Institute serves more than 400 of the top Global 1,000 companies. To learn more about the 2016 Global RepTrak® 100 study and find out what companies top the list, contact Kasper Ulf Nielsen, Executive Partner, knielsen@reputationinstitute.com or visit www.ReputationInstitute.com