Lego Overtakes Ferrari as the World’s Most Powerful Brand
Every year, leading brand valuation and strategy consultancy Brand Finance puts thousands of the world’s top brands to the test. They are evaluated to determine which are the most powerful, and the most valuable.
‘Everything is Awesome’ for Lego
Lego is the World’s most powerful brand. It scores highly on a wide variety of measures on Brand Finance’s Brand Strength Index such as familiarity, loyalty, promotion, staff satisfaction and corporate reputation. Lego is a uniquely creative and immersive toy; children love the ability to construct their own worlds that it provides. In a tech-saturated world, parents approve of the back-to-basics creativity it encourages and have a lingering nostalgia for the brand long after their own childhoods. The Lego Movie perfectly captured this cross-generational appeal. It was a critical and commercial success, taking nearly US$500m since its release a year ago. It has helped propel Lego from a well-loved, strong brand to the World’s most powerful.
Lego has overtaken Ferrari, last year’s most powerful brand. Ferrari remains a very strong brand but its power is slowly diminishing. It has now gone several years without an F1 title and last season struggled even to mount a challenge. The sheen of glory from its 1990s golden era is beginning to wear thin. Meanwhile the departure of Luca di Montezemolo heralds a slight change in strategy at Ferrari’s road car division. Montezemolo kept a strict cap on production to maintain the exclusivity of the brand. Since his departure, Chairman Sergio Marchionne has suggested that this policy will be relaxed to boost revenues.
Many Ferrari owners and aspiring owners are extremely brand-conscious, making the loss of the ‘world’s most powerful brand’ accolade, which Ferrari has held for several years, a particularly heavy blow. Brand Finance CEO David Haigh comments, “Ferrari is still in a strong position and its brand value has actually increased 18% this year to $4.7 billion. The new strategy to capitalise on the brand will certainly drive short term value but over-exploitation risks lasting damage.”
Apple Sets Another Record
The power of a brand is just one component of Brand Finance’s analysis. The company combines the information on a brand’s strength with financial data, to calculate its commercial value. When brand values are calculated, Apple comes out on top. Though not quite on a par with Ferrari or Lego in terms of brand strength, Apple still has a very powerful brand. What sets it apart is ability to monetize that brand. Apple has a remarkable knack for using its brand to popularise and hence monetize existing technology, as it did so successfully first with the mp3 player, smart phone and later the tablet. Critics have been silenced by the success of the iPhone 6 and 6 Plus. Consumers have snapped latest models in their droves, helping Apple set records for quarterly profits ($18bn) and company value ($710bn).
David Haigh continues, “The Apple brand is worth US$128 billion. That value is huge not just in its own terms but also as a proportion of Apple’s record-breaking corporate valuation. It goes to show how valuable brands are as business assets and how important it is to manage them well.”
Twitter is the fastest growing brand; it has almost tripled its brand value in a year, increasing from $1.5 billion in early 2014 to $4.4 billion now. Fellow tech giants Baidu and Facebook have also grown strongly, by 161% and 146% respectively. The three appear to be more effectively managing the transition to mobile advertising than other tech players such as Google, boosting expectations of the financial potential of their brands.
Chipotle stands out among the many successes from the tech and telecoms sectors this year. Its brand value is up 124%. It is eating into McDonalds’ market share by positioning itself as a healthier, tastier and more ethical alternative. McDonalds’ iconic brand has lost $4bn in value this year.
Brand values for hundreds of the world’s top brands from all industries can be found on Brand Finance’s website. The full Global 500 table can be found here and infographics, further insight and analysis in the Brand Finance Global 500 report.