A Study on Impact of Intangible Resources on a Company Profitability with Reference of Tata Motors

A Study on Impact of Intangible Resources on a Company Profitability with Reference of Tata Motors

S.SUJATHA                                                                                                                             K.SHIVA SHANKER
Assistant Professor                                                                                                              22R01E0050

CMRIT Kandlakoya, Medchal                                                                                            CMRIT Kandlakoya, Medchal

INTRODUCTION

Intangible resources are a key component of a contemporary business strategy and have a substantial impact on a company’s profitability. Intangible resources, which include human capital, organisational culture, intellectual property, and brand equity, are less measureable and less visible than tangible assets, which include things like building, machinery, and inventories. Even though they are difficult to measure, intangible are extremely valuable and and have a significant impact on a company’s ability to innovate, gain a competitive edge, and achieve long-term success.

One of the most important intangible resources for firms is intellectual property. Tread secrets, copyright, patents, and trademarks are important tools that protect a business inventions, goods, and brands from imitation or unauthorised use by rivals. Businesses devote significant funds to research and development in order to produce intellectual property that can support their profitability and place in the market. Pharmaceutical corporation, for example, mostly rely on patents to safeguard the formulas of their drugs. By obtaining exclusive rights to promote and sell their products, they can earn enormous profits. Furthermore, it becomes equity is a crucial intangible asset that directly affects a business profitability. Strong brand foster consumer preference, loyalty, and trust, which helps business command higher pricing and take market share even in highly competitive environments. Customer will pay more for brand like Tata, Honda, roll Royce because of their reputation, perceived, quality, and emotional appeal. These companies are prime of how brand equity can boost profitability. Marketing, campaigns, sponsorships, and customer interaction programmes are examples of effective brand management tactics that boost brand equity and, in turn, profitability.

Human capital is another essential intangible resources, it includes the knowledge, abilities and experience of an organisation’s personnel. Organisations understand the critical role that skilled workers play in fostering innovation, productivity, and profitability in todays knowledge based economy. Investing in staff training, development and retention programmes is essential to building a high performance culture and preserving human capital. In order to attract and retain top talent and ultimately increase their profitability through increased employee productive and innovation capabilities, companies such as google and Microsoft place a high priority competitive compensation packages, opportunities for career advancement, and a welcoming work environment.

A company’s profitability is also greatly impacted by other intangible resources such as its relationship with customer, its capacity for innovation and its organisational agility. Maintaining revenue streams and increasing profitability require building long-term client relationship based on satisfaction, loyalty, and trust. Businesses improve customer

Experience and lifetime value by using customer data and analytics to personalised goods, service and marketing initiatives. Comparably, companies with innovation capabilities can launch new goods, services or procedures that outperform rivals and adapt to changing consumer demands, resulting in higher profits and revenue maintaining competitiveness nad grabbing new chances in fast paced business context require organisational agility, which is defined as the capacity to quickly adjust to shifting market condition, technology breakthroughs, and competitive pressures. Business with an innovation, adaptability, and continuous improvement culture are better equipped to handle ambiguity and produce lon-term, sustainable revenue.

Furthermore, comprehending how tangible and intangible resources interact is essential to appreciation how they affect a company overall profitability. Intangible resources boost a company value proposition, competitiveness in the market, and differentiation while tangible assets provide the framework for operations and growth. For example, a modern machinery can help manufacturing companies operate more efficiently and save money, but the real power comes for a company’s intellectual property, brand equity, and human capital because these assets allow them to innovate, make one of a kind product, charge premium prices, and ultimately increase profitability, in order to maximise profitability and shareholder value, businesses must embrace a comprehensive approach  to resources management, identity the synergies between tangible and intangible assets and utilising them to all potential.