Trust in an established company can be grouped into two categories; internal trust and external trust. A company's reputation is based on comparative analysis with its competitors (Kim 2014, pp.838-840). Trust determines how stakeholders behave towards a company. Consumers prefer to spend more on brands they consider trustworthy (Sohn and Lariscy 2015, pp.242). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayThis simply means that competitors have an advantage over your product. Customers switch to competing brand products due to feelings of betrayal (Fennis and Stroebe 2014, pp.109-120). Talents may also retire and choose to work for competing brands in order to safeguard their “personal” reputation (Sohn and Lariscy 2015, pp.237-259). The overall effect of all this is bad business for the company. If a company loses skilled manpower, investors and customer loyalty, the company is doomed to die due to bad business which is ideally characterized by poor sales and huge losses for the company. Danone is currently considering cutting costs by $1.1 billion over the next three years because its turnaround is taking longer than expected (Vidalon, 2017). On the same note, the company is going through a tough time in China because customers no longer trust the organization. This loss of trust is likely to continue to harm the organization considering the sensitivity of infant formula. Company reputation is used by companies when evaluating their overall performance. Having a strong brand image gives an organization an edge over the competition. Conversely, bad reputation leads to compromises that cost the company huge losses. Please note: this is just an example. Get a custom article from our expert writers now. Get a Custom Essay As per Fennis and Stroebe (2014, pp.112 ), consumers prefer to spend more on brands they consider trustworthy than on products from a company that often makes headlines about fraud cases. For this reason, a company's financial performance is directly related to its corporate reputation. The company's exposure and subsequent tarnishing of its reputation has had a positive impact among its competitors, including Nestlé.