[Animation] Tech brands are taking over the world

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

The activities of IT concerns lead to a rethinking of the very concept of “competitive advantage.” By responding quickly to consumer needs and leveraging the power of brand, these companies continually create scalable solutions to emerging challenges.

The animation below shows the most valuable brands in 2019 compared to 2001, according to the annual World's Best Brands ranking. This illustrates how technology companies have managed to scale up to global scale in a relatively short period of time, pushing traditional business mastodons into the background.

The translation was made with the support of EDISON Software.

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What is brand equity and how to measure it?

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

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

Brief description of the assessment methodologyThe assessment uses three key components:

1. Analysis of financial indicators brand products and services.
2. The role played by the brand in consumer purchasing decisions.
3. Brand competitiveness.

1. Financial analysis

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

2. The role of the brand

   This factor reflects the extent to which the brand itself influences the decision to purchase a product/service, without taking into account other factors (such as price, convenience or product characteristics). The Brand Role Index (BRI) gives a quantitative assessment in percentage terms. Determination of RBI for global companies, depending on the brand, is calculated using one of three methods:

   • marketing market research;
   • comparison with the IRB of other brands from the same industry;
   • expert review.

3. Brand competitiveness

   This measures a brand’s ability to create lasting customer loyalty, which ensures continued demand and stable profits in the future. An assessment is carried out based on 10 factors, whose efficiency is assessed relative to other world-class brands in the industry. Competitiveness analysis provides deep insight into a brand's strengths and weaknesses.

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

Internal factors:

	Understanding. A clear understanding among company employees about what the brand symbolizes in terms of its own values, its positioning and offerings. It also involves understanding who the target audience is.
	Commitment. Employees’ dedication to the brand, belief in its importance and mission.
	Control. How competent the management is in matters of brand promotion, and whether the overall development strategy is effective.
	Flexibility. The ability of an organization to constantly develop its business, anticipate market changes, problems and opportunities, and respond to them in a timely manner.

External factors:

	Authenticity. A brand is built on its story, inner truth and opportunity. Are customers' (high) expectations being met?
	Relevance. Relevance to consumer needs, compliance with decision-making criteria for purchasing a product for the relevant demographic strata and geographic regions.
	Differentiation. The extent to which consumers perceive the brand as a differentiated offering.
	Consistency. To what extent the brand has been tested without fail in all formats and points of contact with the audience.
	The effect of presence.How ubiquitous the brand feels. Do consumers, clients and fans talk about it positively? Assessing public opinion both in traditional means of communication and in social networks.
	Involvement. The extent to which customers demonstrate deep understanding, active participation and a strong sense of identification with the brand.

Data sources

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

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

Technology rules

In 2001, the combined value of brands was estimated at $988 billion. Today it is already 2,1 trillion US dollars and shows a compound annual growth rate of 4,4%. Over the years, the world's tech giants have skyrocketed in the rankings and now account for a significant portion of overall brand value.

Today, the top 700 have a combined brand value of nearly $10 billion, and technology companies account for half of the world's 2019 most valuable brands. It will hardly surprise anyone that Apple retains the title of the most valuable brand in the world in XNUMX - for the seventh year in a row.

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

Below are the top twenty most valuable brands in the world. The IT industry is highlighted in blue.

Position	Brand name	Brand value ($ billion)	Change per year	Branch
#1	Apple Lossless Audio CODEC (ALAC),	$ 234 billion	↑ 9%	IT and technology
#2	Google	$ 168 billion	↑ 8%	IT and technology
#3	Amazon	$ 125 billion	↑ 24%	IT and technology
#4	Microsoft	$ 108 billion	↑ 17%	IT and technology
#5	Coca-Cola	$ 63 billion	↓ -4%	Beverages
#6	Samsung	$ 61 billion	↑ 2%	IT and technology
#7	Toyota	$ 56 billion	↑ 5%	Auto
#8	Mercedes Benz	$ 51 billion	↑ 4%	Auto
#9	McDonald's	$ 45 billion	↑ 4%	Public catering
#10	Disney	$ 44 billion	↑ 11%	Entertainment
#11	BMW	$ 41 billion	↑ 1%	Auto
#12	IBM	$ 40 billion	↓ -6%	IT and technology
#13	Intel	40 billion	↓ -7%	IT and technology
#14	Facebook	$ 40 billion	↓ -12%	IT and technology
#15	Cisco	$ 35 billion	↑ 3%	IT and technology
#16	Nike	$ 32 billion	↑ 7%	Sales
#17	Louis Vuitton	$ 32 billion	↑ 14%	Sales
#18	Oracle	$ 26 billion	↑ 1%	IT and technology
#19	General Electric	$ 25 billion	↑ 22%	Multi-industry.
#20	SAP	$ 25 billion	↑ 10%	IT and technology

Other brands from the TOP 100Companies that, for one reason or another, were not included in last year’s ranking are marked as New.

Position	Brand name	Brand value ($ billion)	Change per year	Branch
#21	Honda	$ 24 billion	↑ 3%	Auto
#22	Chanel	$ 22 billion	↑ 11%	Sales
#23	American Express	$ 22 billion	↑ 13%	IT and technology
#24	Pepsi	$ 20 billion	↓ -1%	Beverages
#25	J. P. Morgan	$ 19 billion	↑ 8%	Finance
#26	Ikea	$ 18 billion	↑ 5%	Sales
#27	UPS	$ 18 billion	↑ 7%	Logistics
#28	Hermes	$ 18 billion	↑ 9%	Sales
#29	Zara	$ 17 billion	↓ -3%	Sales
#30	H&M	$ 16 billion	↓ -3%	Sales
#31	Accenture	$ 16 billion	↑ 14%	Business services
#32	Budweiser	$ 16 billion	↑ 3%	Alcohol
#33	Gucci	$ 16 billion	↑ 23%	Sales
#34	Pampers	$ 16 billion	↓ -5%	FMCG
#35	Ford	$ 14 billion	↑ 2%	Auto
#36	Hyundai	$ 14 billion	↑ 5%	Auto
#37	Gillette	$ 14 billion	↓ -18%	FMCG
#38	Nescafe	$ 14 billion	↑ 4%	Beverages
#39	Adobe	$ 13 billion	↑ 20%	IT and technology
#40	Volkswagen	$ 13 billion	↑ 6%	Auto
#41	Citi	$ 13 billion	↑ 10%	Financial services
#42	Audi	$ 13 billion	↑ 4%	Auto
#43	Allianz	$ 12 billion	↑ 12%	Insurance
#44	ebay	$ 12 billion	↓ -8%	IT and technology
#45	Adidas	$ 12 billion	↑ 11%	Fashion, clothes
#46	Axa	$ 12 billion	↑ 6%	Insurance
#47	HSBC	$ 12 billion	↑ 5%	Finance
#48	Starbucks	$ 12 billion	↑ 23%	Public catering
#49	Philips	$ 12 billion	↓ -4%	Electronics
#50	Porsche	$ 12 billion	↑ 9%	Auto
#51	The real	$ 11 billion	↑ 4%	FMCG
#52	Nissan	$ 11 billion	↓ -6%	Auto
#53	Goldman Sachs	$ 11 billion	↓ -4%	Finance
#54	Hewlett Packard	$ 11 billion	↑ 4%	IT and technology
#55	Visa	$ 11 billion	↑ 19%	IT and technology
#56	Sony	$ 10 billion	↑ 13%	IT and technology
#57	Kellogg's	$ 10 billion	↓ -2%	FMCG
#58	Siemens	$ 10 billion	↑ 1%	IT and technology
#59	Danone	$ 10 billion	↑ 4%	FMCG
#60	Nestle	$ 9 billion	↑ 7%	Beverages
#61	Canon	$ 9 billion	↓ -9%	IT and technology
#62	Mastercard	$ 9 billion	↑ 25%	IT and technology
#63	Dell Technologies	$ 9 billion	New	IT and technology
#64	3M	$ 9 billion	↓ -1%	IT and technology
#65	Netflix	$ 9 billion	↑ 10%	Entertainment
#66	Colgate	$ 9 billion	↑ 2%	FMCG
#67	Santander	$ 8 billion	↑ 13%	Finance
#68	Cartier	$ 8 billion	↑ 7%	Luxuries
#69	Morgan Stanley	$ 8 billion	↓ -7%	Finance
#70	Salesforce	$ 8 billion	↑ 24%	IT and technology
#71	Hewlett Packard Enterprise	$ 8 billion	↓ -3%	IT and technology
#72	PayPal	$ 8 billion	↑ 15%	IT and technology
#73	FedEx	$ 7 billion	↑ 2%	Logistics
#74	Huawei	$ 7 billion	↓ -9%	IT and technology
#75	Lego	$ 7 billion	↑ 5%	FMCG
#76	Caterpillar	$ 7 billion	↑ 19%	Multi-industry.
#77	Ferrari	$ 6 billion	↑ 12%	Auto
#78	Kia	$ 6 billion	↓ -7%	Auto
#79	Corona	$ 6 billion	↑ 15%	Alcohol
#80	Jack Daniels	$ 6 billion	↑ 13%	Alcohol
#81	Panasonic	$ 6 billion	↓ -2%	IT and technology
#82	Dior	$ 6 billion	↑ 16%	Fashion, clothes
#83	DHL	$ 6 billion	↑ 2%	Logistics
#84	John Deere	$ 6 billion	↑ 9%	Multi-industry.
#85	Land Rover	$ 6 billion	↓ -6%	Auto
#86	Johnson & Johnson	$ 6 billion	↓ -8%	Sales
#87	Uber	$ 6 billion	New	IT and technology
#88	Heineken	$5,626	↑ 4%	Alcohol
#89	Nintendo	$ 6 billion	↑ 18%	Entertainment
#90	MINI	$ 5 billion	↑ 5%	Auto
#91	Discovery	$ 5 billion	↓ -4%	Entertainment
#92	Spotify	$ 5 billion	↑ 7%	IT and technology
#93	KFC	$ 5 billion	↑ 1%	Public catering
#94	Tiffany & Co	$ 5 billion	↓ -5%	Fashion, clothes
#95	Hennessy	$ 5 billion	↑ 12%	Alcohol
#96	Burberry	$ 5 billion	↑ 4%	Fashion, clothes
#97	Shell	$ 5 billion	↓ -3%	Energetics
#98	LinkedIn	$ 5 billion	New	IT and technology
#99	Harley Davidson	$ 5 billion	↓ -7%	Auto
#100	Prada	$ 5 billion	↓ -1%	Fashion, clothes

In 2001 (the very first year in the report), 100 brands were initially represented. Since then, several technology companies have joined the bandwagon and risen to the top of the list. While 137 well-known brands (including Nokia and MTV) were included in the rating over the years
and then fell out of it.

In a remarkable turnaround, Facebook was at one point in the top 10, but then fell out of the top 14 and took XNUMXth place after a difficult year. However, this is not surprising. The tech giant has been embroiled in litigation ranging from data privacy issues to political influence.

Which brands are the fastest growing?

The fastest-growing brands of 2019 also signal technology dominance, with Mastercard, Salesforce and Amazon leading the way.

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

Position	Brand name	Brand value ($ billion)	Change per year	Branch
#1	Mastercard	$ 9 billion	↑ 25%	IT and technology
#2	Salesforce	$ 8 billion	↑ 24%	IT and technology
#3	Amazon	$ 125 billion	↑ 24%	IT and technology
#4	Gucci	$ 16 billion	↑ 23%	Retail
#5	Starbucks	$ 12 billion	↑ 23%	Public catering
#6	Adobe	$ 13 billion	↑ 20%	IT and technology
#7	Visa	$ 11 billion	↑ 19%	IT and technology
#8	Caterpillar	$ 7 billion	↑ 19%	Multi-industry.
#9	Nintendo	$ 6 billion	↑ 18%	Entertainment
#10	Microsoft	$ 108 billion	↑ 17%	IT and technology

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

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

Break your rules, otherwise your competitors will break you

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

The young audience in their purchasing preferences is focused on technology, is becoming more and more demanding and prefers to share experiences with each other. As a result, traditional brands across all industries are innovating to retain these audiences, and some companies are essentially becoming high-tech themselves in the process.

Gucci, for example, associates its current renaissance with the search for the ideal combination of creativity and technology. The company, whose business foundation has been its historical heritage, is now focusing heavily on e-commerce and social media to engage with its Gen Z customers.

Likewise, Walmart recently announced that it is using virtual reality headsets and machine learning robots to compete with Amazon.

Will all traditional companies eventually become tech companies—or will they simply be eaten alive?

Read also on the EDISON Software blog:

Wired world: how a network of submarine cables entangled the globe in 35 years

Source: habr.com