The effect of investment in the brand value chain on profitability and market value of the firm: lesson of success taken from Amazon

Abstract

This study aims to contribute to the existing business strategy literature by exploring how brand-building activities contribute to the firm's value by analyzing the direct and indirect effect of investment in the brand value chain on brand resonance, profitability, and market value. This study is based on a random sample of 237 Certified European Financial Analysts and a questionnaire was employed. Harman’s single-factor test was conducted to define the presence of common method bias. Hayes Process Macro Model 5 was used to check the multiple mediation processes and indirect effects between the study's variables. The study employs the financial statements of Amazon.com, Inc. from 2010 to 2021 which has been analyzed under the standard multiple regression model. The study results reveal that Harman’s single-factor test extracts 10.397% of the total variance. On the other hand, there are significant positive relationships between the effect of investment in the brand value chain on brand resonance, profitability, and market value. The empirical evidence of this study provides an opportunity to learn about the effect of the investment in the brand value chain leads to increase brand equity which builds up in the customers' mindset and then transforms to market performance and profitability. The findings of this study can be a useful reference for future studies in academic research related to strategic thinking to maximize profitability and market value through the brand value chain.