Winners and losers in global brand valuation update
October 2007
Business Week has released their yearly update on the 100 most valuable global brands in 2006. The top six remained in the same position, despite difficult market conditions for many. Soft drink manufacturer Coca-Cola remains at the top spot with a value of $67 billion, despite a 1% drop due to flagging demand for soft drinks. Software giant Microsoft narrowly remained at second place in the table with a 5% drop in value to $59.9 billion, blamed on increasing threats from Google and Apple, with IBM staying in third, despite a 5% gain due to the sale of low profit businesses and improved marketing performance, leading to a value of $56.2 billion.
Mobile handset manufacturer Nokia was the largest gainer in the top ten, with an increase in brand value of 14% to $30.1 billion due to investment in fashionable handset designs and an increased focus on low-cost models for the developing world. Despite this, they remained in sixth place on the list.
The largest winner on the list, rising from 38 to 24 is the search engine Google. This brand achieved a staggering 46% growth in value to $12.3 billion, recognised by it's inclusion as a verb ("to Google") in the Oxford English Dictionary. Coffee chain Starbucks has the second largest increase of 20% to $3 billion, largely due to its lifestyle marketing campaign, with online auctioneers eBay making up the top three with an increase of 18% to $6.7 billion, despite increasing competition from Google.
At the opposite end of the table clothing chain GAP continued its recent weak performances with a 22% drop in brand value to $6.4 billion, mainly due to the continuing failure to define its own fashion identity and attract the crucial twenty-something market. Car manufacturer Ford is the second largest loser with a 16% drop to $11 billion, continuing its poor overall performance in almost every area of the company ranging from weak marketing and bad press to a shallow product portfolio, all reflected in its bottomed-out share price. Film specialists Kodak continues with its difficult transition from traditional camera products manufacturer to major player in the digital photography and printing industry, but low profits contributed to a 12% drop in brand value to $4.4 billion.
Ian Lewis, Chief Executive of SAMIAN Underwriting Agencies, the market leading Intangible Assets insurance solutions provider, commented that the continued growth in global brand values is a reflection of the increasing importance placed on intellectual property by companies worldwide. He said "This news confirms what has long been known by those specialising in Intellectual Property that one of the most valuable assets owned by any company is often their brand. For many companies, especially small to medium enterprises, this can add substantially to their value. But many simply don't know the best way to protect their IP, and this can leave them vulnerable to the cost of attempting to enforce it. Even a successful action can cost millions of dollars, and for many companies this is simply not an affordable route to take. For SME's and start-ups, it can even mean the effective end of their business." He went on to say that "We believe that our innovative range of products can help secure the future of any company concerned about the potential cost of protecting their intellectual property. Our exclusive GuardTM, ProtectorTM, EnforcerTM and RepSureTM products provide reassurance for both managers and shareholders that their valuable IP is protected from the potentially devastating cost of litigation."
He went on to say that "I expect that the market for insurance products to protect against these kinds of costs will continue to grow rapidly. Not only are companies becoming more aware of the value of their IP, but they are also recognising the true financial cost of both enforcing it, and protecting it from attack by competitors. Even unsuccessful litigation over the use of IP can be hugely costly. It is vital to protect against the potentially dangerous impact that this can often have on a balance sheet, or even the future success or failure of an entire company."
