[Animation] Tech brands are taking over the world.

Creating a global brand that is resilient and competitive is a non-trivial task.

The activities of IT corporations lead to a rethinking of the very concept of 'competitive advantage.' By quickly responding to consumer demands and leveraging brand power, these companies continuously create scalable solutions to emerging challenges.

The animation below shows the most valuable brands in 2019 compared to 2001, according to the annual 'Best Global Brands' ranking. This illustrates how technology companies managed to scale to a global level in a relatively short period, pushing traditional business giants into the background.

Translation made with the support of EDISON Software.

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What is brand value and how can it be measured?

The authors of the 'Best Global Brands' ranking have created a formula for measuring brand value. The brand's value is the net present value (NPV) or the present value of the revenues the brand will generate in the future.

The formula evaluates brands based on their financial forecast, brand role, and brand strength.

A brief description of the evaluation methodologyThe assessment uses three key components:

1. Analysis of financial metrics of the brand's products and services.
2. The role that the brand plays in the consumer's purchase decision.
3. Brand competitiveness.

1. Financial analysis

   It measures the gross financial return for investors or, in other words, economic profit. Economic profit is operating profit after tax minus all costs.

2. Brand role

   This factor reflects how much the brand itself influences the decision to purchase a good/service, disregarding other factors (such as price, convenience, or product features). The Brand Role Index (BRI) provides a quantitative assessment in percentage. Determining the BRI for global companies, depending on the brand, is calculated using one of three methods:

   • market research;
   • comparison with the BRI of other brands in the same industry;
   • expert assessment.

3. Brand competitiveness

   This measures the brand's ability to cultivate sustainable customer loyalty, ensuring consistent demand and stable profits in the future. The assessment is based on 10 factors, whose performance is evaluated relative to other world-class brands in the industry. Competitive analysis provides deep insights into the brand's strengths and weaknesses.

These 10 factors are based on both internal and external metrics.

Internal factors:

	Understanding. A clear comprehension among company employees of what the brand symbolizes in terms of its own values, positioning, and offerings. It also implies an understanding of what the target audience represents.
	Commitment. The dedication of employees to the brand, belief in its importance and mission.
	Management. How competent is the leadership in promoting the brand, and is the overall development strategy effective?
	Flexibility. The ability of the organization to continuously develop the business, foresee market changes, challenges, and opportunities, and respond to them in a timely manner.

External factors:

	Authenticity. The brand is based on its history, internal truth, and capabilities. Do customer expectations (high) match reality?
	Relevance. The relevance to consumer needs, alignment with the criteria for making purchase decisions for relevant demographic segments and geographical regions.
	Differentiation. How consumers perceive the brand as a differentiated offering.
	Consistency. To what extent has the brand been tested across all formats and touchpoints with the audience.
	Presence effect.How ubiquitous the brand feels. Are consumers, clients, and fans speaking positively about it? Assessment of public opinion in both traditional media and social networks.
	Engagement. To what degree do customers demonstrate a deep understanding, active participation, and strong sense of identification with the brand.

Data Sources

Reliable brand evaluation involves a comprehensive study of a wide range of different information sources. In addition to desk research and expert assessment, the following data sources (if available) are included in the evaluation model:

• Financial data: annual reports, investor presentations, various analytics, etc.
• Global data on consumer goods, sales statistics from open and closed sources.
• Text analytics, social media monitoring.

Technology rules

In 2001, the total brand value was estimated at $988 billion. Today, it stands at $2.1 trillion and shows a compound annual growth rate of 4.4%. Over the years, global tech giants have rapidly risen in the rankings and now represent a significant portion of total brand value.

As of today, the total brand value of the top hundred is almost $700 billion, with technology companies accounting for half of the 10 most valuable brands in the world. It should come as no surprise that Apple retains the title of the most valuable brand in the world in 2019 - for the seventh consecutive year.

Only 31 brands from the 2001 ranking remain in the current list of the best global brands, including Disney, Nike, and Gucci. Coca-Cola and Microsoft are among the few that have remained in the top ten.

Below is the top twenty of the most valuable global brands. The IT industry is highlighted in blue.

Other brands from the TOP-100New marks companies that, for various reasons, did not appear in last year's ranking.

In 2001 (the very first year of the report), 100 brands were initially presented. Since then, several tech companies have joined the ranks and risen to the top of the list. Over the years, 137 well-known brands (including Nokia and MTV) have made it onto the rankings.
and then dropped out of it.

A notable twist occurred with Facebook, which was once in the top ten but later fell out of the top 10 to rank 14 after a challenging year. However, this is not surprising. The tech giant has been embroiled in controversies ranging from data privacy issues to its influence on political life.

Which brands are the fastest-growing?

The fastest-growing brands of 2019 also signal technological dominance, with Mastercard, Salesforce, and Amazon leading in this respect.

The companies in this ranking have significantly grown compared to last year.

The success of these brands can be attributed to their ability to anticipate rapidly changing customer expectations.

While the relationship between business performance and brand equity has been widely discussed for decades, it is clear that customer satisfaction bolsters brand strength and contributes to impressive financial results.

Break your rules, or else your competitors will break you.

In addition to anticipating changing needs, some of the most successful brands are also focused on a younger customer base. This is most evident in the luxury and retail sectors — the two fastest-growing sectors for the second consecutive year.

The young audience is increasingly tech-savvy in their purchasing preferences, becoming more demanding and preferring to share experiences with each other. As a result, traditional brands across various industries are innovating to retain this audience, and some companies in the process are essentially becoming high-tech themselves.

Gucci, for example, associates its current renaissance with the search for the perfect blend of creativity and technology. The company, whose business foundation was its historical legacy, is now focusing heavily on e-commerce and social media to engage with its Generation Z customers.

Similarly, Walmart recently announced that they are using virtual reality headsets and machine learning robots to compete with Amazon.

Will all traditional companies eventually become tech-driven — or will they simply be consumed alive?

Also read in the EDISON Software blog:

The Wired World: how 35 years of undersea cables have interconnected the globe

Source: habr.com