Will American Brands Be a Casualty of War

Will American Brands Be a Casualty of War
by Sean Silverthorne, Editor, HBS Working Knowledge

Does your U.S. brand play well overseas? If so, heed the words of Harvard Business School professor John Quelch: A swelling anti-American tide could wash away the international popularity of U.S. brands.

In a recent op-ed piece for the Sunday London Times, Harvard Business School professor John Quelch warned that popular U.S. brands could be in for a rough ride overseas should anti-American sentiment grow over President Bush's handling of Iraq. In this e-mail interview, Quelch continues on that theme.

Silverthorne: In general, what effect will the war and the perceived unilateral tactics of the president have on the reception of American brands overseas?

Quelch: During the 1990s, American brands such as Coca-Cola, Marlboro, and McDonald's rode the wave of globalization. From Red Square to the upper Amazon, they brought people a taste of America, along with the promise of freedom and prosperity. The end of the Cold War signaled victory for Brand America. As closed economies opened up to foreign trade and investment, Brand America stood ready to sign up the best local business partners, to recruit the best distributors, and to capture market share from weaker, local competitors.

Selling the American dream has paid off handsomely. Eight of the ten most valuable brands in the world, according to the Interbrand consultancy, are American, and each derives more than half its sales from outside the United States.

"The cost to the American economy could be far greater than the cost of war. "
—John Quelch

But now a deepening opposition to American foreign policy is threatening the long-term strength of these brands. And the cost to the American economy could be far greater than the cost of war.

We have reached the tipping point where Pax Americana now threatens Brand America. For some, the problem is the Bush administration's pattern of unilateral decision making. For others, especially in Europe, Bush's manner has stirred up latent anti-Americanism.