BestBikes, a super-premium bicycle brand, has entities throughout Europe. The group develops a new bicycle, owned and promoted by the German principal entity of the group, BestBikes International GmbH (“BBINT”). BBINT acquires the manufacturing technology licenses needed to manufacture the bicycle from third parties. The bicycles are developed and manufactured to the highest standards in Romania, by a newly established entity, BestBikes Romania Ltd (“BBR”), within its brand new manufacturing facilities and development center. BestBikes‘ UK entity, BestBikes UK Ltd (“BBUK”), has been selected to launch an online platform where customers can connect with the brand and receive exercise support to complement their purchase.
BBINT, BBR, and BBUK carry out different DEMPE functions, each of which contributes to the overall value of the intangibles of the bicycle product line.
Based on the example scenario, the possible DEMPE functions and contributions of different entities are described below.
Development
The development of intangibles refers to everything associated with developing ideas for the brand and products and putting plans and strategies in place for their creation.
Several different processes and ideas created the intangibles for the bicycle product line. Each of the abovementioned entities was responsible for various parts of the development process, with some functions overlapping. For example, while BBINT was solely responsible for the initial brand development and the acquisition of technology licenses, it had limited input compared to BBR when it came to establishing quality standards for the manufacturing process. BBUK was responsible for setting up the sales process, refining the user experience, and creating the client platform.
Enhancement
The term ‘enhancement‘, in the context of DEMPE, involves continuing to work on aspects of intangibles to make sure they can perform well at all times and be constantly improved.
Just like with the development stage, the enhancement functions are divided between the three entities in the example. BBINT was mainly responsible for promoting the brand and enhancing its awareness, as well as for searching for the latest technologies to enhance the characteristics of the product. BBR contributed to the enhancement of the manufacturing process while BBUK contributed to improving the client purchase experience, and had sole responsibility when it came to encouraging client interaction.
Maintenance
Maintaining intangibles involves doing everything that is possible to ensure they continue to perform well and generate revenue for a business.
In the case of BestBikes, maintenance was all about making sure clients were happy and that the quality of the products was consistently high. The majority of the responsibility for
this fell with BBUK, which was in charge of nurturing client connections, monitoring client feedback, and quality control. BBUK also had input on making sure the purchase experience was consistent. BBINT was responsible for monitoring brand health and maintaining the brand‘s legal license agreements. BBR collected the client feedback and made sure that any performance issues were addressed through constant enhancements, revisions, and updates.
Protection
Brand protection is important for ensuring that the value of a brand‘s assets remains strong. It involves securing IP legal rights, making sure nobody can copy the ideas and monitoring competitors‘ activities.
The processes for protecting the bicycle brand were mainly divided between BBINT and BBUK entities, with BBR just handling the legal registration of the technology enhancement patents. BBINT took care of enforcing brand protection and legally registering the brands, and, to a lesser degree, monitoring the technology license agreements. BBUK developed the brand‘s online support systems and kept track of the competition and ensured client privacy protection, while BBR is handling aspects of patenting the business‘s manufacturing know-how.
Exploitation
In relation to intangibles, the term ‘exploitation‘ refers to the way in which intangibles are used to generate profits.
For BestBikes, the majority of responsibility for exploitation fell with BBUK, which was in charge of introducing the brand to market, selling the products, connecting with customers online, and helping clients benefit from the products. BBINT showcased the brand along with its other brands, while BBR implemented the licensed and developed technology during the manufacturing process as well as for future enhancements.
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