According to the Brand Finance Global 500 2016 report, Disney is recognized as the most influential brand in the world

· Out of the top 10 fastest growing brands, four are Chinese.

· Disney is the world’s most influential brand due to the immense success of Star Wars.

· Despite experiencing a decline in sales, Apple’s brand value increased by 14% to US$145.9 billion, making it the most valuable brand globally.

· Volkswagen’s brand value experienced a decline of US$12 billion as a consequence of the emissions controversy.

· Leading brands are outperforming the S&P 500 average in terms of share performance.

Brand Finance, a brand valuation and strategy consultancy, conducts an annual assessment of thousands of major global brands to determine the most powerful* and valuable ones in their Brand Finance Global 500 report. The 2016 report reveals:

Source: Brand Finance. The World’s Most Powerful Brands, top 10.

Source: Brand Finance.

Disney’s Dominance

According to Brand Finance, Disney’s strategic acquisitions and its impressive brand portfolio have propelled it to become the world’s most influential brand. Notable acquisitions, including ESPN, Pixar, the Muppets, Marvel, and most significantly, Lucasfilm and the Star Wars franchise, have contributed to Disney’s brand dominance.

Brand Finance estimates the value of the Star Wars brand to be US$10 billion, driven by the success of Star Wars Episode VII: The Force Awakens and the high demand for Star Wars merchandise.

Lego’s Decline

Lego experienced a setback, losing its top spot in the brand power rankings. This decline can be attributed to a fine imposed by German regulators for attempting to control retail discounts and accusations of censorship for trying to prevent Chinese artist Ai Wei Wei from incorporating Lego into his artwork. Despite this, Lego currently holds the second position in the value rankings.

Source: Brand Finance. The World’s Most Valuable Brands, top 10.

Source: Brand Finance.

Brand Finance utilizes its Brand Strength Index assessment to determine a royalty rate for each brand. This rate is then factored into revenue data to calculate the overall brand value.

Apple’s Continued Leadership

Apple maintains its top position in terms of brand value. This 14% increase can be credited to the success of the iPhone 6 and the more recent iPhone 6s. The company reported record-breaking revenue of US$51.5 billion and profits of US$11.1 billion for the fourth quarter of the 2015 fiscal year, with annual revenues reaching US$233.7 billion. Despite a saturated market, Apple sold 74.8 million handsets in the last quarter. Combined with the growing adoption of Apple Pay, Brand Finance asserts that claims of Apple’s decline are unfounded.

Eight out of the top 10 most valuable global brands operate in the technology or cloud computing sectors. Google occupies the second spot, followed by Samsung at No. 3 and Amazon at No. 4. The remaining positions within the top 10 include Microsoft (No. 5), Verizon (No. 6), AT&T (No. 7), and China Mobile (No. 9).

Volkswagen’s Decline

Volkswagen’s brand faced significant challenges, emerging as one of the poorest performers of the year. The company’s admission that it manipulated diesel vehicles to activate emission-reduction settings solely during testing, resulting in emissions exceeding regulatory limits by up to 40 times under normal driving conditions, severely impacted its brand value. As a result, Volkswagen’s brand value plummeted by US$12 billion to US$18.9 billion, causing its ranking to fall from 17th to 56th.

Emirates: The World’s Most Valuable Airline Brand

Emirates announced a 17% increase in brand value, reaching US$7.7 billion. This growth has secured the airline’s position as the world’s most valuable airline brand for the fifth consecutive year. Now ranked at No. 171, Emirates sits 47 places ahead of its nearest competitor. Since its debut on the _Brand Finance Global 500 _report in 2009, Emirates has more than doubled its brand value.

Boutros Boutros, Emirates’ Divisional Senior Vice President of Corporate Communications, Marketing & Brand, highlighted the company’s strategic brand-building investments, encompassing marketing, sponsorship initiatives, a commitment to quality products and services, and a technology-driven approach to customer experience. This customer-centric approach, according to Boutros, positions Emirates for continued success.

Brand Finance CEO David Haigh noted Emirates’ consistent growth, with a 17% increase in brand value this year. Haigh emphasized that Brand Finance’s analysis shows Emirates’ growing popularity, as evidenced by improvements in brand equity scores related to consumer familiarity, consideration, preference, satisfaction, and recommendation. Based on these trends, Brand Finance predicts that Emirates could become the first Middle Eastern brand to break into the top 100 of their ranking by 2020.

China’s Remarkable Growth

Brand Finance highlights that Chinese brands are experiencing remarkable growth, with four of them securing positions among the top 10 fastest-growing brands. WeChat and Evergrande Real Estate are notable examples of this trend.

WeChat’s user base grew by over 40% between late 2014 and late 2015, exceeding 650 million users, with 70 million located outside of China. WeChat’s offerings extend beyond messaging services to encompass videogaming and payment features, distinguishing it from competitors like WhatsApp. Its brand value has surged by 83%, reaching US$6.5 billion.

Evergrande Real Estate emerged as the fastest-growing brand, demonstrating a remarkable 112% increase in brand value between 2015 and 2016. Ranked at No. 375 in terms of brand value, the company was absent from the 2015 rankings. Brand Finance suggests that Evergrande’s presence at the top may raise concerns about the potential overheating of China’s property market and the overall stability of its economy.

Several Chinese brands debuted on the list of the most valuable brands, having been unranked in the previous year. These include: Dalian Wanda Commercial Properties (No. 264), Shenzhen Development Bank (now Ping An Bank, ranked at No. 269), Poly Real Estate (No. 305), China Everbright Bank (No. 345), China Railway Group (abbreviated to CREC, ranked at No. 359), Air China (No. 364), China Railway Construction Corporation (abbreviated to CRCC, ranked at No. 394), Netease 163.com (a gaming company and information portal, ranked at No. 430), China Eastern Airlines (No. 464), and Hangzhou Hikvision Digital Technology, the world’s largest supplier of video surveillance solutions (No. 489).

Predictive Power of Brand Finance Rankings

In December 2015, Brand Finance conducted a retrospective analysis of share prices for the world’s most valuable brands, examining the stock market performance of the companies that own them. Their findings indicate that businesses with strong brands tend to outperform the market.

Between 2007 and 2015, the average return for the S&P was 49%. Brand Finance asserts that leveraging their data could have yielded returns of up to 97% for investors. Specifically, investments in companies with a brand value to enterprise value (BV/EV) ratio exceeding 30% generated returns of 94%. Focusing on the 10 companies with the highest BV/EV ratios resulted in an impressive 97% return.

Notably, over a hundred (115) of the top 500 brands in the 2016 rankings belong to this high-performing category. The selection encompasses luxury brands such as Burberry, Gucci, and Ralph Lauren; well-known consumer brands like Audi, Land Rover, Dove, Ikea, and Nestle; and financial and B2B brands like Korea’s Shinhan bank and Fujitsu.

Further Information:

*Based on factors such as brand familiarity, loyalty, promotion, marketing investment, staff satisfaction, and corporate reputation.

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