Proposed Solutions to the Brand Protection Challenges and Counterfeiting Risks Faced by Small and Medium Enterprises (SMEs)

Background to International Counterfeiting It has been estimated that counterfeiting, the unauthorized imitation of goods or services with intent to deceive (6), was responsible for approximately $60 billion in lost sales of consumer and industrial products in the United States in 1985 In comparison, $3 billion in sales were lost in United States market in 1978 due to piracy of reputable merchandise. Currently, counterfeiting has been estimated as increasing at an incredible rate of thirty percent a year. One of the fastest growing product counterfeit segments is in industrial products. Close to five percent of the total world trade consumer industrial products is accounted for by the importation of fraudulent goods and services. The counterfeit market in the United States exists and continues to thrive due to the immense demand for copies of well-known, reputable brands, but at a fraction of the cost of the real item. By forging goods, counterfeiters reduce their costs by denying the royalties that rightfully belong to the originator of the forged item. In another aspect, if existing technology is copied from another firm, the counterfeiting organization has virtually no research and development costs while the firm that produced the technology costs are significantly higher than those of the counterfeiter.

The activities of the Emerging Crimes Unit regarding fighting and preventing cyber threats concentrate on:

  • Misuse of technology and technology enabled crimes
  • Evolution of the criminal business model: organized crime links
  • Analysis of cybercriminals’ modus operandi
  • Evolution of cybersecurity
  • Specific focus: terrorists’ use of the internet, cyberwar and cyberterrorism

Small and medium enterprises (SMEs) are vulnerable to the same counterfeiting threats faced by larger businesses, yet, the unique brand protection challenges they face have not been explored. These challenges relate to resource constraints that make it difficult to implement traditional brand protection strategies. This article discusses the problem of product counterfeiting from the perspective of SMEs, while considering how the resource constraints they face impact their ability to establish brand protection programs. Potential solutions are described, and 10 testable propositions intended to guide future research and the practice of brand protection in SMEs are proposed.

SMEs and Cyber Risk § Cybercrime is indiscriminate in its approach, not only targeting multinational corporations and companies in the IT sector, but also SMEs, which are seen as easy targets. § The losses deriving from cybercrime are currently estimated at between US$375 and US$575 billion per year. However, Interpol has estimated that in Europe alone, the cost of cybercrime has reached €750 billion annually. § Cybercrime’s impact on national economies is huge and SMEs are increasingly affected by cybercrime attacks. SMEs represent a pillar of the European economic and social structure, as well as 99.9% of Italian enterprises. § This trend prompted UNICRI to commission a research study concerning the impact of cybercrime on Italian SMEs.

Register the Conference Now (at) BPEF 2019

Write us to Connect

Follow us on Twitter

Connect us on Linkedin

Like us on Facebook

Our Partners

Quick Enquiry