A Financial Analist of Citigroup Catherine O’Neill, director of Citi Research’s European Media Team, says under-investment in brands risks long-term volume declines as new entrants gain a foothold in the markets and calls for more brandbuilding efforts to secure long term growth potential. The question boils down to one of bottom line growth versus organic sales growth – short term results or longer-term potential. While cost reduction has delivered bottom line growth, investors are only too aware that cutting costs is not a sustainable long-term strategy and at some point, the company has to look to stimulate growth again.
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