It’s understandable and expected that the best brands of the world may not keep their place in the top 8 over a period of 17 years. From the data from Interbrand.com, we collected top 8 best brands from the years 2000 , 2004 ,2008, 2012 and 2016. The comparison between them reveals some interesting insights:
What Best Brands tell us:
Tech Companies grow faster:
Tech companies like Apple, Amazon and Samsung have moved up 30 to 40 places in the list over this period. More importantly, they have increased their valuation significantly; e.g, Apple grew by ~30 times. Google had never made it to the list before 2005, and yet in 12 years of it has become one of the most valuable brands in the world. Facebook might break into this list very soon as well. These companies can bring in disruptive technologies and capture value faster than anyone else.
Tech Companies might also fall faster:
Nokia, which was a very strong brand in the 2000s, got hurt in the smart phone war. The brand was eventually sold to Microsoft. But what is astonishing was the time it took to get displaced from its throne. For tech companies, the risk of a new and disruptive player taking over is always very high. Only companies with a diverse portfolio and fast reaction time to market changes have survived disruption in their industries.
Tech Companies capture more value:
Coca Cola was the top brand for years before it lost the place to Apple. But it didn’t happen because Coca Cola was losing ground. It was a result of Apple and Google’s significant increase in value. In 2012, Coca Cola and Apple’s valuations were similar. But just in 4 years, Apple’s valuation became 2.5 times of Coca Cola.
Because of that, most of the top 8 brands are technology companies:
Only in 2004, 3 non-technology brands were in the top 8 brands list. Apart from that, in the years studied, at least 6 companies were technology companies. It shows which industry captures most of consumer mindsets. Consumers are more aware of a company like Apple than a company from FMCG industry.
Non-tech companies are harder to displace:
Non-tech industries usually takes more time to change. Because of that, it’s harder to remove them from their leadership. Companies like Coca Cola, McDonald’s, Nike, and Louis Vuitton may not have gained a lot on brand valuation, but they also didn’t lose much in bad years. As a result, Pepsi, Burger King or Adidas have found it very difficult (never happened) to displace these brands from their place.
Best Brands of the world provide a good indication of how and where industries are shifting. It also shows how much time it takes for change to set in. Technology companies might be more susceptible to change, but others like auto manufacturers have also undergone major changes over the years.