Geopolitics is the study of how a country’s geography inclusive of location, terrain, land size, climate, soil and raw materials affect its foreign, economic, military policy and positioning strategy. The word geopolitics comes from the words “geography” and “politics”. The term geopolitics means a broad analytical framework in international relations, encompassing different phenomena such as political instability, tensions and military conflicts between countries, terrorist threats or geographical events that can have regional or global impacts.

Globalisation has increased scope for trade and economic growth due to cross-border trade, and cooperation. However, over the last few years, global trade and the geopolitical landscape are rapidly changing because of chaotic results of geopolitical events. The chaotic landscape of geopolitics is hindering global trade.

Geopolitical risk adversely affects the global economy and triggers financial instability through a variety of channels. On the macro and micro economy side, geopolitical risk impacts the economy negatively affecting GDP growth, inflation, trade, investment, consumption and savings. The factors of geopolitical economy include, climate, topography, demography, natural resources, and applied science of the region being evaluated. Geopolitics focuses on political power linked to geographic space, in particular, territorial waters and land territory in correlation with diplomatic history.

Macroeconomic network of geopolitics can affect the outlook on the government’s fiscal position as well as inflation dynamics. History suggests that war has a detrimental effect on inflation and economic growth. As we have already seen, conflict in the Middle East has a direct impact on the cost of trade, the prices of imported goods and, ultimately, economic growth.

Israel-Palestine War, Terrorist Insurgency in Iraq, Ethnic Violence in South Sudan, border disputes in India, Russia’s invasion of Ukraine have resulted in havoc in terms of human lives and to the economies of the countries and regions. Geopolitical risk, which has increased of late, is threat to financial stability. Recent conflict in the Middle East, fears of rise in US-China tensions over Taiwan and the Russian invasion of Ukraine have all raised concerns about geopolitical stability. Adverse geopolitical events can trigger rapid shifts in market sentiment and sharp increases in uncertainty, exposing existing vulnerabilities in financial institutions and markets.

Moreover, they can reduce consumption and investment plans, with knock-on effects for economic growth, and activate adverse feedback loops between the real economy and the financial world. This special feature starts by providing a conceptual overview of the channels through which geopolitical risk can affect euro area financial markets, the economy and the financial sector. It then goes on to present empirical evidence on the effects of geopolitical risk on euro area non-banks and banks.

Let’s look at how the present geopolitical elements are affecting India: 

Raised stakes in Kashmir

Increased global cooperation with India, and thus its rise in geopolitical value, comes at potential costs for its neighbour Pakistan. The most immediate threat is control in the Kashmir dispute. Washington’s hinge away from Pakistan and towards India is visible in its different levels of engagement with the two South Asian nations. United States recently defended its military maintenance package to Islamabad. However, this material expression of support appears to be the exception instead of the rule. Messages from the past and present Presidents of US have historically been subtle signs of Washington’s aspirations in the region. Shrinking support in Washington considering India’s rising status means that Pakistani leverage in the Kashmir border dispute is at risk now more than ever. Despite recognizing recognition both sides in the Kashmir conflict, the United States has increasingly shown biased support to India. Pakistan has not curbed terrorism, it is on ever increase in many parts of world.  This not only raises the stakes in the Kashmir conflict but also adds a new layer to the region’s already tense security architecture.

Increased risk of Chinese revenge

India’s geopolitical rise has also increased the chance of an escalation with China by directly putting its interests at risk. For instance, Japan’s expanded partnership and alignment with India has focused on building resilience against Chinese presence in the East and South China Sea. China’s sweeping claims of sovereignty over the sea and the sea’s estimated 11 billion barrels of untapped oil and 190 trillion cubic feet of natural gas have antagonized competing claimants Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam. On July 12, 2016, the arbitral tribunal adjudicating the Philippines’ case against China in the South China Sea ruled overwhelmingly in favor of the Philippines.

India’s increased influence is also repositioning its leverage on border disputes with China. For instance, recent independent investigations exposed that the United States shared crucial satellite imagery of Chinese military positions during a December 2022 border clash, helping to give India an edge. Such intelligence sharing was a direct result of US-India joint initiatives those were confirmed. A dispute over the boundary is critical since it is a major determining factor for the two nations. China cannot give away its claims to their lands without having a weakened claim on the sovereignty threat over Tibet forcefully taken away in the 1950s.

The regional response

Considering these developments, China and Pakistan will adjust their strategic calculations, accordingly, bringing along risks of big tensions and acceleration in warlike situation. China’s assertiveness in Taiwan is an expected consequence. While traditionally this has come as a reaction to the United States, recent Indian strategic gains bring an added element of risk for Beijing. Whether rightly perceived or not, these heightened fears in China will impact its confidence in what it regards as its territories, and the region and West will have to compete with those developments. 

Beijing’s current hostility in the region in response is an active sign of these adjustments. China is asserting its strength in the region. It has also directly responded to the border dispute risks, given India-US collaboration, by seeking support elsewhere. In renewed talks with Bhutan earlier this year, Beijing pushed an exclusive border deal that could build leverage against India, if it loses strategic ground in the disputed Doklam plateau. Beijing’s attempted renaming of several areas which India disputes have also accompanied a similar policy of counter response. As such, increasing pressure on China by the West via India has pushed China in unexpected ways, leading to strong responses from Beijing that Washington may not be expecting.

Likewise, Pakistan is expected to insist itself in Kashmir in fear of its diminishing international value. irrespective of the subject matter being discussed or the theme of the forum and fails to get any support or traction. India has previously rejected Pakistan’s attempts to raise the Kashmir issue at international forums, asserting that the “Union Territory of Jammu and Kashmir and the Union Territory of Ladakh have been, are and will always remain integral and inalienable parts of India.”

 India has dismissed Pakistan’s attempt to inject Kashmir into a discussion of the workings of the Security Council as an undignified misuse of the General Assembly forum. Pratik Mathur, a minister at India’s UN mission, reacting to Pakistan bringing up Kashmir, said that it “misused this forum to spread baseless and deceitful narratives, which is not a surprise.”

“I will not dignify these remarks with any response just to save valuable time of this august body,” he added witheringly. Mathur, who did not name Pakistan and referred to it as “one delegation” was reacting to Pakistan’s Permanent Representative Munir Akram’s suggestion to set up a Security Council body to monitor the implementation of its resolutions on Kashmir. But the target of his condescending dismissal was clear. Regardless of the topic under discussion or its relevance, Pakistan consistently brings up Kashmir.

Given the nuclear capabilities of both nations, the international community should remain on high alert, especially considering Pakistan’s expanding military and economic cooperation with China. Pakistan and China may “lock” both India and the United States out of counterterrorism efforts in the region, which poses not only risks to their national security but also to regional stability; terrorist attacks have brought India and Pakistan to the brink of war on numerous occasions. 

Moving forward

Overall, India’s rise cannot simply be viewed from the lens of Delhi gaining global ground. The crucial question is one of threat perceptions on the Pakistani and Chinese sides which whether legitimate or not risk destabilizing the region. Members of the international community who are giving increased value to India as a geopolitical anchor must beware of unrest and consequences. External shocks have aggravated Nepal’s economic vulnerabilities too. Decreasing external remittances, inflation, and the increasing trade deficit have contributed to low forex reserves. This has impacted its already scarce foreign investments and has also persuaded the import-dependent country to regulate or ban the import of certain commodities, including fuel. Although not as catastrophic as Sri Lanka and Pakistan, Nepal’s crisis is a recipe for a perfect disaster, considering the history of its political instability and governance.

In all above cases, China’s complicity has also been critical. China’s less conditioned and easily available loans motivated these countries to continue borrowing without promoting any structural reforms, making them more economically and politically vulnerable. In addition, China’s high-rate interest loans and employing its capital goods and labor has accumulated debts rather than reaping economic benefits for the host country.

Neighbourhood Risk includes spillover effects caused by problems in a region, in a country’s trading partner, or in countries with similar perceived characteristics.

BCG matrix helps in doing a comparative analysis of business potential and the evaluation of environment. Relative market share shows SBU Sales this year leading competitor’s sales this year and market growth share shows industry sales this year minus industry Sales last year. The analysis requires that both measures be calculated for each SBU. The dimension of business based on strength and relative market share will measure comparative advantage indicated by market dominance. The key theory underlying this fact is existence of an experience curve and that market share is achieved due to overall cost leadership.

BCG matrix has four cells, with the relative market share and the vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0, if all the SBU’s are in same sector, the average growth rate of the industry is used. For example Nestle India’s all SBU exist in food industry. But, if all the SBU’s are located in different sectors of industries, then the mid-point is set at the growth rate of the economy, for example the Tata group’s SBUs exist in a variety of sectors.

The four cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these cells represents a particular pattern of business. To clarify each cell of the matrix, we will be discussing examples of Amul’s products. Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is India’s largest food product marketing organization with annual turnover (2013-14) US$ 3.0 billion. The word amul is derived from the Sanskrit word amulya meaning rare, valuable. The co-operative was initially referred to as Anand Milk Federation Union limited hence the name AMUL. It has the largest distribution network compared to any FMCG company. It has nearly 50 sales offices spread all over the country, more than 5000 wholesale dealers and more than 700000 retailers. In order to maintain costs at lower levels, Amul India has never spent more than 1% of its budget on advertising. However it has still been successful in creating the same impact. It’s simple yet appealing ad campaigns with its lucky mascot a cute and chubby girl usually dressed in polka dots has not changed so far.

Stars

 Stars represent business units having large market share in a fast growing industry. They usually generate cash because of fast growing market. Stars require huge investments to maintain their flourishing status. The net cash flows of ‘Star’ SBU are usually modest. Please understand that SBU’s located in this cell are attractive as they are located in a robust industry and these business units are highly competitive in the industry. When the industry matures, a successful star will become a cash cow. Amul pure ghee, cheese spread, ice creams, dairy whiteners and flavored bottled milk are examples of ‘star’ in Amul’s product portfolio.

Cash Cows

Cash Cows represent business units having a large market share in a mature yet slow growing industry. Cash cows require little investment but they generate steady cash that can be utilized for investment in other business units. It’s not the stars but cash cow SBU’s which are the key source of cash, and are in particular the core business of a corporation. They are the supporters of an organization. These businesses usually follow stability strategies. When cash cows lose their appeal and move towards descent, then a divestment policy may be followed. Amul butter, fresh milk range, mozzarella cheese are examples of cash cows in their portfolio.

Question Marks

 These SBUs represent business units having relatively low market share in a high growth industry. They require huge amount of cash for maintenance and to gain market share. They require consideration to determine if the venture of the SBU is feasible. Question marks generally possess new goods and services which have a good commercial prospective. There is no specific strategy which can be adopted. If the firm thinks it has dominant market share, then it can adopt expansion strategy, else retrenchment strategy can be adopted. The fact is that most businesses start as question marks as the company tries to enter a high growth market in which there are already existing businesses. If ignored and not rectified in time, then question marks turn into dogs. But, if huge investment is made, then they have potential of becoming stars. Masti dahi, lassi, mithai, tetra packed milk are examples of question marks.

Dogs

Dogs represent businesses having weak market shares and they operate in low-growth markets. They are cash traps. They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these SBUs can gain market share only if they don’t face competition. That means other firms are weaker firms. An SBU can turn into dog because of high costs, poor quality, ineffective marketing, poor strategies etc. A dog is dragged on usually when a firm has strategic reasons to do so. If the SBU has fewer prospects for it to gain market share, it is better to divest the SBU.  The thumb rule is number of dogs should be avoided and minimized in an organization. Amul chocolate, energy drink, infant milk range and pizza are examples of dog.

The BCG Matrix is not free from limitations. The limitations are defined hereby.

• BCG matrix classifies businesses as low and high, but generally businesses run on medium scales too. Thus, the true scale/degree of business needs to be reflected.
• High market share does not always lead to higher profits. The fact is that there are high costs also involved with high market share.
• Growth rate and relative market share are not the only indicators of profitability. This model ignores and overlooks other indicators of profitability.
• Many times, dogs may help other businesses in gaining competitive advantage. The competitive advantage earned by other SBUs because of the dogs is more than cash cows sometimes.

Strategies based on BCG Matrix are as follows:

Build

By increasing investment, the product is given a thrust such that the product increases its market share. For example an organization can push a Question mark into a Star and finally a cash cow.

Hold

A company when cannot invest because it has other investment commitments due to which it holds a product or products in the same quadrant. For example is Amul decides to hold its question mark products in the same quadrant as higher investment to move a question mark into star need to put on hold.

Harvest

This is very well observed in the Cash cow scenario, wherein the company reduces the amount of investment and tries to take out maximum cash flow from the said product which increases the overall profitability. For example, Amul butter has retained its market share for decades. It’s indeed a leader as Amul owns 88 percent share in butter market.

Divest

It is observed in case of Dog quadrant products which are generally divested to release the amount of money already stuck in the business.

This is how the BCG matrix is the best way for a business portfolio analysis. The strategies recommended after BCG analysis help the firm decide on the right line of action and help them implement the same.

Mutual funds are diversified in nature: When you buy a mutual fund, your money is combined with the money from other investors; this allows you to buy part of a pool of investments. A mutual fund holds diversity of investments which can make it easier for investors to spread their investments possessing different stocks or bonds. Not all investments perform well at the same time. Government policies, market behavior, Sensex etc keep the stocks move up and down therefore,  holding a variety of investments help offset the impact of poor performing stocks, yet, taking advantage of the good ones. This is known as diversification.

They are professionally managed: Mutual funds are managed by professionals called portfolio managers. They decide in which fund to invest the money, and when to buy and sell investments. They keep themselves abreast of market information. They suggest the best plan for their clients with minimum risks involved and maximum returns. The portfolio manager make their clients understand the investment plans and the risks involved in simple language. They are experts and take the responsibility of managing funds well. The portfolio managers are backed by a committed research team, investors are provided with the services of an experienced fund manager.

Mutual funds are easy to buy and sell: Mutual funds are widely available through banks, financial planning firms, investment firms, credit unions and trust companies. You can sell your fund units or shares at almost any time if you need to get access to your money. But you may get back less than you invested depending on the market conditions.

Mutual funds act as emergency corpus: Building an emergency corpus is very important for all. We need funds for emergencies which come suddenly. One can start investing ₹ 2,500 p.m in a liquid fund for say 4-5 years and have an emergency kitty ready when required.

A wide range of funds to choose from: Mutual funds can be used to meet a variety of financial goals. For example: A young investor with a stable income and many years to invest may feel comfortable taking more risk to achieve greater potential return. He may therefore, invest in an equity fund. A middle-aged investor trying to balance risk and return more moderately could invest in a balanced mutual fund that consists of a mix of stocks and bonds. An investor approaching retirement might be less comfortable with risk and more interested in fixed income investments. He may invest in a bond fund.

Beats Inflation: The best part about mutual Funds is that they help investors generate better inflation-adjusted returns without spending a lot of time and energy on it, while most people consider letting their savings ‘grow’ in a bank, they really do not realize that inflation keeps nibbling away its value.

Convenience: Mutual funds are an ideal investment option when you are looking at convenience and timesaving opportunity. With low investment amount alternatives, the ability to buy or sell them on any business day and a multitude of choices based on an individual’s requirement such as funding down payments to buy house, paying fees of children for higher education, marriage in family etc. Mutual funds allow investors to plan their financial goals and investment needs. Once planned, investors are free to pursue their course of life while their investments earn for them. The biggest advantage for any investor is the low cost of investment that mutual funds offer, as compared to investing directly in capital markets. Most stock options require significant capital, which may not be possible for young investors who are just starting out. Mutual funds, on the other hand, are relatively less expensive. The benefit of scale in brokerage and fees translates to lower costs for investors. One can start with as low as ₹ 500 and get the advantage of long term equity investment.

Liquidity: Investors have the advantage of getting their money back promptly, in case of open-ended schemes based on the Net Asset Value (NAV) at that time. In case your investment is close-ended, it can be traded in the stock exchange, as offered by some schemes.

Some common types of mutual funds are:

Money market funds: These funds invest in short-term fixed income securities such as government bonds, treasury bills, bankers’ acceptances, commercial paper and certificates of deposit. They are generally a safer investment, but with a lower potential return then other types of mutual funds

Corporate income fund: These funds buy investments that pay a fixed rate of return like government bonds, investment-grade corporate bonds and high-yield corporate bonds. They aim to have money coming into the fund on a regular basis, mostly through interest that the fund earns.

Equity funds: These funds invest in stocks. These funds aim to grow faster than money market or fixed income funds, so there is usually a higher risk that you could lose money. You can choose from different types of equity funds including those that specialize in growth stocks.

Balanced funds: These funds invest in a mix of equities and fixed income securities. They try to balance the aim of achieving higher returns against the risk of losing money. Most of these funds follow a formula to split money among the different types of investments. They tend to have more risk than fixed income funds, but less risk than pure equity funds.

Index funds: These funds aim to track the performance of a specific index such as the UTI Nifty Index Fund, Franklin India Index Fund, ICICI PRU Index Fund etc. The value of the mutual fund will go up or down as the index goes up or down. Index funds typically have lower costs than actively managed mutual funds because the portfolio manager doesn’t have to do as much research or make as many investment decisions.

Specialty Funds: These funds focus on specialized mandates such as real estate, commodities or socially responsible investing. For example, a socially responsible fund may invest in companies that support environmental stewardship, human rights and diversity, and may avoid companies involved in alcohol, tobacco, gambling, weapons and the military.

Fund-of-fund: These funds invest in other funds. Similar to balanced funds, they try to make asset allocation and diversification easier for the investor.

IDFC Foundation has recently come out with a film ‘One Idiot‘ which is part of the IDFC Foundation’s commitment to educate the youth of India to be financially independent by investing in mutual funds.

Also AMFI today is promoting and encouraging retail investment in stock market through mutual funds. Their Mutual Fund Sahi hai is now one of the most well remembered and memorable slogan. Do visit the website in case you are yet to start investing in Mutual Funds.

In 1963, Milton Friedman – an American Economist and Statistician also known as the free-market philosopher described corporate social responsibility as “fundamentally subversive”, writing that corporate responsibility is the pursuit of personage interest of an organization to survive in an uncontrolled market. He also said that firms do not exist in vacuum.

Organization will grow bigger and stronger in proportion with the rise of community standards.  Stakeholders are increasingly demanding information regarding an organization’s environmental, social and economic impact on society. Inclusive growth is a multidimensional concept that needs considerable commitment from business organizations. Theoretical and empirical analysis indicates that firms can strategically engage in socially responsible activities to increase private profits. While a firm gets noticed for its social efforts, the firm can obtain additional benefits such as enhancing the firm’s reputation and the ability to generate profits by differentiating its product, the ability to attract more highly qualified personnel or the ability to extract a premium for its products.

In India around Rs 22,000 crore is expected to be poured into the social sector from 2015 onwards as Indian business houses ramp up CSR funding. Under the Companies Act, 2013, which stipulates companies with a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or a net profit of Rs 5 crore to spend at least 2% of their average net profits made over three preceding years on CSR programes.

Many organizations are staring at the inadequacy of the CSR initiatives they had been flaunting over the years. Till now, many companies kept postponing their CSR funding. After an initial phase of indifference and, later, even sly attempts by a few at gaming the rules  fitting in what they are doing currently as CSR or looking for loopholes to avoid doing what they ought to be doing, companies are now preparing for a new era or a new genre of CSR interventions. On the flipside, the mandatory interventions of government will spoil scene – companies which used to spend much more on CSR may now get away spending less; this is just a thought.

At the moment, CSR or corporate social responsibility is an ever hotter topic. The Economist Intelligence Unit finds CSR becoming rising corporate agenda not only in the US, UK and China but globally. Everyone has an opinion on it. It is a hot topic in Commerce and Management lectures.

CSR has a big role to play in enhancing corporate image. A research conducted by McKinsey found that 95 per cent of CEOs felt that society has elevated expectations from businesses in regards to social responsibilities today than five years back. Consumers prefer buying products and services from companies supporting worthy social cause. CSR has multidimensional effects on a firm’s existence in society.

Risk Management: Commitment in CSR activities help organizations to manage emerging social risks which at times emerge as an offshoot of their operational activities; when the weather is bad, and when things go wrong corporate can influence the perception of people at large in society. Corporate usually get clean chit from the consumers, community, regulators, employees and the suppliers.

Brand Positioning: Consumers usually like to get associated with a company, which is ethical and has a positive image; many companies are becoming innovative while contributing to social cause. P&G’s CSR program ‘Shiksha’ is an integral part of their global philanthropy program. It is based on of the theme ‘Live, Learn and Thrive’. Shiksha has helped 2,80,000 underprivileged children access education. The programe is built and supported over 140 schools across India in partnership with many NGOs. The advertisements of P&G state that when P&G products are bought, some portion of the price paid for it goes into their Shikha initiative.

CSR increases ability to attract, motivate and retain employees: CSR helps companies to attract good employees. With Gen Y (called also millennial) making up more of the modern workforce, it is becomes important to pay attention to what they think about an organization. Research has found that 88 per cent of Gen Y (children born between the years 1980 to 2000) chose employers based on strong CSR values; it also showed that 86 per cent would consider leaving if the company’s CSR values no longer met their expectations. Business schools, like New York University’s Stern Business School, added courses related to CSR to keep up with their students’ rising demand. The Gen Y is known as responsible corporate citizen with sensitivity towards social and environmental issues. Therefore, a good corporate image helps employees and communities assist the corporate in achieving its Vision and Mission, as they all feel alike and contribute towards a common goal. According to Forbes, the 10 companies that are best at CSR are Microsoft, Google, Walt Disney, BMW, Apple, Daimler (Mercedes-Benz), Volkswagen, Sony, Colagte Palmolive and Lego. All of these firms attract young and enthusiastic workforce.

Investors like investing in these firms: There are many financial institutions globally, which have made it part of their policy to study the CSR activities of the company before investing. M&A decisions are also taken after consideration of CSR and Sustainability activities, even if it makes perfect economic sense for the investors.

CSR Boosts Corporate Image: It allows the company to have certain respect in the society among its stakeholders. Companies that implement CSR, like Unilever with its sustainable living plan, have enjoyed increased growth and profits. I would love to quote here how TNT has used its core business to help people in disasters. Through its CSR programe which is established at its Amsterdam headquarters, 50 designated employees are always on call to intervene anywhere in the world at 48 hours’ notice. The programme was established based on the company’s strong internal culture that places an emphasis on giving back to society. Due to their access to transportation and logistics, the cause became an easy fit. Employees have responded to over two dozen emergencies, including the Asian tsunami in 2004, since its inception.

A survey was recently conducted by Reputation Institute which is a global research institute for carrying surveys and research. Their surveys enable business leaders to take more confident business decisions that build and protect the business image globally. Reputation Institute recently conducted a CSR pulse survey globally, which found that CSR was responsible for more than 40 per cent of a company’s reputation and 42 per cent of people based their feelings about a company on the firm’s CSR. About 31 per cent of global consumers believe businesses should change the way they operate to align with social and environmental needs.

Another study shows that nine out of 10 consumers want companies to go beyond the minimum standards required by law to operate responsibly and address issues. 53 per cent of workers think that they like to contribute to a job which can make an impact on social wellbeing. And, such a job makes them happier. About 35 per cent would even take a pay cut to work for a company committed to CSR. Another study found that the more actively a company pursues worthy environmental and social efforts, the more engaged its employees are.

So that is a strong indication that CSR is not simply a superficial matter, but has a solid impact on consumers, employees and communities. There is a concrete rise in awareness of CSR and real demand for it. Greater than any strategy, CSR can give business a competitive advantage while also making positive changes to the community and the environment.

Logo is a graphical mark used to identify a company, an organization, product or brand. Logos are displayed alongside of a company’s name in order to generate awareness of the company’s association with a particular product or service. It is presented with graphical lettering, or an abstract shape of design.

The current era of logo design dates back in the 1870s; with the first abstract logo of Bass Brewery – the biggest beer company then.  Its logo red triangle began the branding campaign in history.  Its brand name and the iconic “red triangle” logo were registered as a trademark under the British Trade Mark Registration Act 1875 on 1 January 1876, just when the act was freshly implemented. After successfully becoming the first registered trademark in England, Bass Ale was filed as trademark no.1. It seemed practical for Bass Ale to use a shape as basic as a lozenge triangle; the triangle symbolizes rising energy, prosperity and the wealth of life. The use of red color, on the other hand, also signifies energy, as well as passion, vitality and enthusiasm for life. The brand name is handwritten to underline the elegant and authentic expression.

Today there are countless corporations, products, brands, services, agencies and other entities using an ideogram (sign, icon) or an emblem (symbol) or a combination of sign and emblem as a logo. But, out of countless logos only few are recognized without name. An effective logo may consist of both an ideogram and the company name (logotype) to emphasize the name over the graphic, and employ a unique design via the use of letters, colors, and additional graphic elements.

A good logo is instantly recognized; it should be inimitable, and exclusive to be remembered by people. Usually people recall a name, a design, a shape if they see it twice, whereas their eyes could pass right over written matter. So people don’t register written statements compared to a shape or design. The more often a potential customer sees and associates a reference to a company the more familiar he/she will begin to feel to the company. And their association with the logo makes their buying process easier.

Logos are an example of intangible assets because they hold value, but not in a physical form. They have become an essential part of a company’s identity, and are used heavily in the marketing of products and services. A well-recognized logo can increase a company’s goodwill, and is trademarked for intellectual property protection.

The three ellipses seen in the logo for Toyota represent three hearts: the heart of the customer, the heart of the product, and the heart of progress in the field of technology.

So why should organizations invest in a logo? Maybe the organization is considering branding or re-branding. Perhaps it has grown very big and needs fighting out competition or it plans to diversify business, whatever the reason, designing a evocative logo is the starting point of the exercise. The logo intensifies the branding efforts. Building a solid, well-designed logo is pivotal to the success of a business, its life and its marketing and sales activity.

Not only does a logo set apart a business from others, it appears on its stationary, website, advertisements, business cards of its executives, packaging, hoardings, name board – it becomes an inevitable part of the corporate communication.  The company’s logo design influences the design of its entire existence and business process. It represents the philosophy of the company therefore designing a ‘brandable’ logo is a must.

See how the letter “M” for McDonald’s stands out. There really isn’t much meaning attached to this logo. In the 60′s, McDonald’s wanted to change the logo but their design consultant and psychologist Louis Cheskin insisted that they continue with the golden arches made in “M” Louis told them that the customers will unconsciously recognize the logo as “symbolism of a pair of nourishing breasts.” Whether this is true or not, their logo is one of the most recognizable in the world.

Historically, pictures were used to convey messages to individuals who were unable to read. A picture of a loaf of bread would be used on a signage to denote a baker. Even if the word “bread” was not displayed, consumers knew the type of product available at that store.

A powerful logo is one of the most valuable assets a company can utilize to broaden its base and maximize its recognition. It is a vital and extremely rare component in the success of a corporation. The practice of using symbols to claim ownership is not a modern invention. Logos existed in the world for hundreds and thousands of years to facilitate identification. Romans used to stamp their bricks with the manufacturer’s emblem, place of origin, as well as their intended destination. As time progressed the logos became more refined and stylized, offering them a touch of sophistication and distinctiveness. Today’s world is surrounded with an abundance of diverse icons and monograms, as well as countless forms and styles of logos and trademarks that consist of numerous shapes, symbols and color combinations.

BMW has a history in aviation and its logo stays true to its roots. The blue and white represent a propeller in motion with the sky peeking through. In fact, BMW had a role in World War II as a creator of aircraft engines for the German military.

The Apple logo represents the forbidden fruit from the “Tree of Knowledge” in the Biblical creation story of Adam and Eve.

There’s no rule against giving a facelift to a logo. Every big brand name you can think of, whether it’s Apple, FedEx, Pepsi, or KFC to name a few, has had a major logo redesign at some point during its history. There are many cases in which a redesign is necessary, which cannot be ruled out. Pepsi’s logo was redesigned at $1,000,000 by the Arnell Group in 2008. In early October 2008, Pepsi launched an entirely new logo, but it did not come into effect until early 2009, when the last logo ended. The Pepsi Globe is now two dimensional again and the swirl design has been changed to look like a smile, of which changes size according to the type of Pepsi. It also added white outlines.

Australia and New Zealand Banking Group’s logo was redesigned in 2009 for $15,000,000. Though the earlier logo was not a brilliant one, it was simple and meaningful. There was nothing strange or anything futile about the old logo.  People had accepted the logo and it went well with them for doing business with ANZ. The new logo does not connect with the mindset of people. The new ‘ANZ’ letters lost the dynamic incline of the old logo. The four horizontal lines don’t make any sense. It is not implicit why ANZ needed to spent $15 million to change its good logo to a bad one.

The importance logo cannot be underestimated in the branding strategy.  Therefore choosing the right logo is very important for the company. The process takes a lot of time, vision, capacity, strategy and most importantly lot of money. They have become progressively crucial in the corporate world as companies make strenuous efforts to distinguish themselves from one another in the worldwide arena. They have to be simple, readable, visually distinctive, cohesive, relevant and consistent.