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Best Global Brands

Brand strategy and valuation consultancy, Brand Finance, released its Global 500 list of most valuable brands┬áin February. It makes for an interesting read, and is well worth a look. Of course, the top of the list contains some recognisable names. The top four are Apple, Samsung, Google and Microsoft, all in the same position from last year’s league table. US communications giant Verizon closes out the top 5.

Scratching the surface, however, reveals some interesting trends. Twitter is the fastest growing brand, increasing its brand value by 185% in just one year, mainly as a result of improved user interface, strengthening ability to monetise both users and visitors, and its ongoing ability to enable real time interaction between consumers and companies. However, the rest of the top 10 improvers show an invasion from the East. The second highest increase at 161% was Baidu, China’s answer to Google, who increased by 146%. Alibaba, China’s answer to Amazon, also saw the 7th highest increase of 90%, and whilst its brand value is much smaller than Amazon’s at $11 bn compared to $56 bn, it has just secured $25bn through the largest ever IPO, giving it plenty of capital to challenge Amazon. As Brand Finance notes, “as Alibaba gains ground outside China, it could rapidly leave Amazon in the shade.”

China Merchants Bank, and India’s HCL also feature amongst the top 10 increasers.

By contrast UK brands dominate those which are struggling. Standard Chartered bank, Royal Mail and Tesco are all in worst decliners, with Tesco losing some 39% of its brand value. However, the UK is not alone, with Japan having four companies in the bottom 10 – namely Hitachi, Nomura, Toshiba and Sony, all declining by at least 30%. America completes the worth 10 decliners with Avon, McLane and Johnson Controls.

The other surprising trend in the survey is that brand strength does not appear to correlate with brand value as an asset. The Brand Finance methodology combines brand strength with the earning potential of the brand. The brand strength is a combination of a variety of factors such as familiarity, loyalty, promotion, staff satisfaction and corporate reputation, whilst the earning potential is derived by estimating how much a company could charge to license its brand to another company. There appears to be little correlation between the brand strength, and the overall value attributed to a brand.

The company with the top brand strength was Lego, but was placed 382nd in the table for overall value. None of the top 10 brands for value were in the top ten for strength, and vice versa. In fact, only one of the top 10 companies on brand strength was in the top 10 for overall value, being Coca Cola. It suggests that there is a limit to the impact that brand strength alone can achieve to enhancing brand value.

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