Goldman Sachs Brand Reputation Depends on Their Business Model
Photo courtesy of London Evening Standard
How can a brand like Goldman Sachs, seemingly damaged beyond repair after recent news, ever recover? I believe the answer lies in brand strategy.
There’s no shortage of coverage these days on Goldman Sachs and its Abacus CDO/CDS guaranteed double-dipping deal. Top management must be feeling like they’ve been thrown in a blender, spinning as they have over the course of a few weeks from a $4 billion Q1 profit announcement to an SEC fraud charge, shareholder lawsuits and public outrage. But will recent disclosures and events damage the brand in the long run, or help the brand? Most pundits seem to think the brand is and will continue to be damaged. But is that true?
The answer, I believe, depends on how one defines the business of Goldman Sachs. Maybe the current brand is damaged beyond hope of future brand profitability, but perhaps actively and strategically managing brand perceptions might do the trick. Historically, Goldman Sachs operated as an investment bank, serving its clients and profiting from the deals it put together. As an investment bank, it supported the continued growth of the American economy as a value-adding institution. So defined, the Goldman Sachs brand has been notably damaged by recent disclosures of past behavior. But arguably, that Goldman Sachs has been eclipsed in recent years by the new Goldman Sachs, which functions less like an investment bank and more like a producer and marketer of theoretical financial products (“synthetic CDOs” and CDSs) that add no appreciable value to the broader economy. In other words, more like a gambler who plays both sides against the middle than a serious market maker and player. Interesting approach to brand strategy. In this context, Goldman’s brand reputation, particularly among those who admire making money from nothing and without concern for any consequences, is likely increasing.
Goldman’s management, directors and shareholders now just need to decide what kind of business they want to be in.
Loading ...
