According to a report by Interbrand released late last month, Apple (AAPL) is now the most valuable global brand.
Coca-Cola (KO) had held the top spot for 13 straight years in prior Interbrand reports.
It now sits at number 3.
Top Ten Most Valuable Global Brands
1 Apple
2 Google (GOOG)
3 Coca-Cola
4 IBM (IBM)
5 Microsoft (MSFT)
6 General Electric (GE)
7 McDonald's (MCD)
8 Samsung (SSNLF)
9 Marlboro (INTC)
10 Toyota (TM)
Website: Best Global Brands 2013
Press Release: Interbrand's 14th Annual Best Global Brands Report
Report: Best Global Brands 2013
This top ten ranking of global brands has some similarities to the entirely separate ranking of global brands released earlier this year by Millward Brown.
Apple, Google, Coca-Cola, IBM, Microsoft, and McDonald's make the top ten on both lists. The specific value these two rankings place on each brand is in some cases, not surprisingly, very different (e.g. the study earlier this year puts Apple's brand value at $ 185 billion, the newer ranking places it at more like $ 98 billion).
Some of the are differences between the two rankings will naturally come down to methodology.
Interbrand's methodology is explained here. For inclusion in their rankings, a brand needs to have a "truly global" presence as defined by their methodology.
"In measurable terms, this requires that:
- At least 30 percent of revenues must come from outside the brand's home region
- It must have a presence in at least three major continents, as well as broad geographic coverage in emerging markets
- There must be sufficient publicly available data on the brand's financial performance
- Economic profit must be expected to be positive over the longer term, delivering a return above the brand’s operating and financing costs
- The brand must have a public profile and awareness above and beyond its own marketplace.
These requirements...lead to the exclusion of some well-known brands that might otherwise be expected to appear in the ranking. The Mars and BBC brands, for example, are privately held and do not have publicly available financial data. Walmart, although it does business in international markets, often does so under a variety of brands and, therefore, does not meet Interbrand's global requirements.
For similar reasons, brands in several sectors have been excluded."
These are:
Telecommunications - strong ties to their national markets but "awareness challenges" further away from home.
Airline industry - capital intensiveness and low margins result in brands that "struggle to achieve positive economic profits over the long term."
Pharmaceutical companies - consumer relationship is generally with the product brands (more so than the corporate brand owner) and "insufficient publicly disclosed financial data on pharmaceutical product brands."
Top 100 Global Brands
Among the top 100, Nokia's (NOK) brand, took the biggest hit in both absolute and percentage terms. Not exactly a surprise.
Google was the biggest gainer in absolute terms.
Facebook (FB) was the biggest gainer in percentage terms.
To me, it seems rather unlikely that brand value could ever be pinned down -- and I mentioned this in the post on Millward Brown's rankings -- as precisely as might be implied by these rankings.
Still, these studies are provide some indication which brands matter around the world and how -- in at least a rough sense -- their value might be changing.
Adam
Established long positions in AAPL, GOOG, KO, MSFT, and GE at much lower than recent prices. Recently added small new IBM position.
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Applying Newton's Fourth Law
Origin of Newton's 4th Law?
"Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: He lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases." - Warren Buffett
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Notable Quote
"Warren and I have not made our way in life by making successful macroeconomic predictions and betting on our conclusions.
Our system is to swim as competently as we can and sometimes the tide will be with us and sometimes it will be against us. But by and large we don't much bother with trying to predict the tides because we plan to play the game for a long time.
I recommend to all of you exactly the same attitude.
It's kind of a snare and a delusion to outguess macroeconomic cycles... ...very few people do it successfully and some of them do it by accident. When the game is that tough, why not adopt the other system of swimming as competently as you can and figuring that over a long life you'll have your share of good tides and bad tides?" - Charlie Munger
Our system is to swim as competently as we can and sometimes the tide will be with us and sometimes it will be against us. But by and large we don't much bother with trying to predict the tides because we plan to play the game for a long time.
I recommend to all of you exactly the same attitude.
It's kind of a snare and a delusion to outguess macroeconomic cycles... ...very few people do it successfully and some of them do it by accident. When the game is that tough, why not adopt the other system of swimming as competently as you can and figuring that over a long life you'll have your share of good tides and bad tides?" - Charlie Munger