Tag: Volkswagen

 

 

By Avik Chattopadhyay

 

As we read this, over 300 brands from across the world have taken a stand against Russia since it invaded Ukraine. Some real big names like Apple, General Motors, Volkswagen, Levi’s and MasterCard have decided to halt/ suspend operations and shipments. Consultancy firms like BCG, McKinsey and Deloitte have taken a call. Even some Chinese brands like Bank of China and Tik Tok have joined the list. All non-Russian energy companies have moved away either like BP and Shell divesting their shareholding in Rosneft or ExxonMobil walking away from the Sakhalin 1 project.

 

While tracking the updated status on the internet, I came across an interesting Twitter feed that I cannot help but share here.

 

 

While such economic ‘sanctions’ are very much expected, it is interesting to note that equally big brands like Coca-Cola, Unilever, Bridgestone, Pirelli, Pepsi, Philip Morris, Nestle, McDonald’s, Mondelez, Kellogg, Citi, Marriott, and Caterpillar still continue to do business in Russia.

 

But the situation is very fluid. In fact, as I write I have an update that Coca-Cola and McDonald’s have also decided to suspend operations.

 

Yale School of Management is keeping a real-time track of the status. Over 300 Companies Have Withdrawn from Russia – But Some Remain | Yale School of Management

 

So, what makes some take one stand while others take another, or do not take the same one? Does this mean that McKinsey does not support Russia while Mondelez does? Or does BP denounce war while Bridgestone does not?

 

While the ones who have taken a call against Russia are obviously being lauded for calling out an “imperialist” like Putin, are the ones who consciously have not, being subjected to criticism and pressure to fall in line? Will they experience serious fallouts on brand image and reputation in the long run?

 

During my internet studies on the rise of Vladimir Putin and his oligarchs over the last two decades, I came across a term called “The Moscow Rules”. Bing! I remembered reading about this in ‘Tinker, Tailor, Soldier, Spy’.

 

The Moscow Rules is a collection of 10 one-liners supposedly used by the Soviet secret service. They are also displayed at the International Spy Museum in the US. Post-Cold War, the rules remain as per the grapevine, now being used by the oligarchs to spread their presence across the world. They go as follows…

 

1. Assume nothing.

2. Never go against your gut.

3. Everyone is potentially under opposition control.

4. Do not look back; you are never completely alone.

5. Go with the flow, blend in.

6. Vary your pattern and stay within your cover.

7. Lull them into a sense of complacency.

8. Do not harass the opposition.

9. Pick the time and place for action.

10. Keep your options open.

 

The stark simplicity hits you right away. There is no fancy business school jargon. Just plain common sense. Reminds me of Confucian precepts. Or Murphy’s Laws.

 

Each is very much applicable to the world of brands. Each is fundamental to brand strategy and nourishment. Each feels more honest and powerful over the previous one. And the obvious paradoxes are simply brilliant! Just read 7, 8 and 9 together and you will get the drift. The sequence is intuitive, clinical, and utterly brutal. It’s like Machiavelli, Sun Tzu and Kautilya rolled into a Karpov move on the chessboard. Cold, calculated and thoroughly revised and rehearsed. Yet, #10 tells you that it could all go wrong, and you need to go back to #1.

 

In the context of the Rules, I asked myself a few questions about the strategic decisions taken by brands in the context of the invasion of Ukraine.

 

Pulled the plug or switched off power?

Have the brands who have shown empathy with Ukraine pulled the plug altogether or merely switched off the power supply for the time being? The list by Yale uses terms like suspended and halted. These are all temporary measures and not finite ones. Once the invasion is brought to an end, whatever the outcome, they will be back for sure. Russia may be seen as a villain today but tomorrow it will all boil down to Putin, even if he wins this round. After all, a huge market of 145 million cannot be left alone to the Chinese and locals, can it? This is just like al Chinese brands, except for Tik Tok, were back in business in India just weeks after Galwan. The pressures of the marketplace and the shareholders are just too strong to pull the plug.

 

Out of fear or fervour?

With no disrespect to any brand that has suspended / halted operations in Russia, the action was taken more out of fear of political reprisal at home and other key markets rather than a foundational abhorrence of all war and military aggression. If it were so, similar stands could have been taken in cases of Iraq, Syria, Yemen, Palestine, or Tibet. It is all a matter of convenience. Most brands believe in #10 when it comes to morals. They take the high ground as the situation suits them.

 

Hypothesis or hypocrisy?

There are brands and then there are… brands. While a lot of posturing goes around about being led by and aligned with greater purpose[s], at the end of the day it just boils down to market share and share value. Most brands will not bat an eyelid to see their weaker competition die. Most would not hold themselves back from steamrolling a market. Most would love to enjoy ‘command and control’ in the markets they operate in, at the cost of unsafe working conditions, unethical influencing tactics, use of child labour and paying off officials and systems for staying a step ahead.  And they would not mind preaching to the ‘lesser’ ones, typically local / domestic. While constantly conspiring on how to gobble them up or bleed them to capitulation.

 

These brands have blond hair and blue eyes.

No harm can befall them.

 

I end my tirade with a cartoon by the Russian cartoonist Aleksey Merinov that speaks about the harsh reality and futility of war. Either with tanks or tweets!