In the business-to-business sector, the brand owner´s employees are increasingly playing a key role in terms of representing the brand to existing and potential customer. The role of a well-established internal brand equity can give a business-to Business Company the edge it needs in the market today. Internal branding has recently emerged as an important issue in industrial market. This study aims to find out how internal brand equity and its determinants affect the external brand equity of business-to-business companies. This study is based on previous research of internal brand equity in business-to-business setting. In this study four hypothesis were tested. Surveys were conducted among manufacturing and promotional companies in Sweden and Latvia, which resulted in 94 complete and useful response with a response-rate of 28.3%. The findings offer evidence, that internal brand equity with determinants have a great impact on the external brand equity of a firm.

In the business environment of today, competency-based organisations with a people- centric focus are at large becoming the norm and replacing task-based firms. This shift is driven by the benefits which the organisation can gain from leveraging the skills, attitudes, values and behaviours of its staff, through a competency-based approach (CBA). This approach can be described as a process where the attributes of the staff members, expressed as core competencies, are converted into capital stock of the firm. It is the success of this conversion that yields a competitive advantage for the firm, which past research has indicated lies at the core of the CBA. Similarly, another emerging trend for organisations of today is that of internal branding (IB). IB is a marketing approach where staff behaviour is aligned with the brand promise of the firm in order to enhance internal brand commitment (IBC) and ultimately staff performance. This concept has grown in relevance in an increasingly service centred economy, where the staff member is responsible for the delivery of the brand promise. Exploring the combined efforts of a CBA with that of IB has to date not yet been researched in detail. The basis of doing this is research is thus clear when evaluating the commonalities, as both approaches aim for alignment and leverage of staff attributes and behaviour ultimately resulting in IBC. The purpose of this study is to gain a deeper understanding of how a CBA, aided by IB as the operative factor, influence IBC. In order to fulfil this purpose, a qualitative study was conducted through semi-structured interviews with employees and managers at a service sector firm. The data collection was grounded in a conceptual model with a foundation in previous research, depicting IB as the operative factor through which core competencies impacted the attraction, selection and attrition, which are stages of the employee lifecycle. These interviews allowed us to gain a deeper understanding of our research phenomena and five underlying themes emerged. The themes were organisational context, competency-based approach, alignment and identification, development and participation and communities and communication. Our empirical findings indicated the interconnectedness and interdependence between these themes. The themes that emerged from our analysis formed the basis for our final conceptual model. This final model provided a visual depiction of the factors that are at play in the creation of IBC through a layered style approach. The findings of the study showed that for a CBA to be effective and successful, the IB components of communities and communication play an important part. Furthermore, the findings suggested that a CBA is a continuous process of influencing actions rather than a three-stage attraction, selection and attrition cycle. Our study highlighted the importance of alignment and integration of the organisation’s HR practices. Furthermore, our study demonstrated how CBA aided by IB can be entrenched in the organisation and influence IBC.