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Middle East Companies Secure Slots In Most Valuable Brand Report Alongside Global Players
  • STC moves up the ranks to assume the position of most valuable brand in The Middle East
  • Emirates retains most valuable brand position in the UAE
  • Etisalat rises 113 places with 45% increase in brand value
  • Qatar National Bank enters the list for the first time with 56% increase in brand value
  • Apple falls from world’s most valuable brand after 5 years at the summit

Dubai, UAE, February 2, 2017:  Saudi Telecom Co. (STC), the kingdom’s biggest operator, is the Arab world’s most valuable brand, while Emirates, the world’s largest airline, continues to be most valuable brand in the United Arab Emirates (UAE), according to Brand Finance’s Global 500. The Global 500, an annual ranking from the leading valuation and strategy consultancy, ranks brands by monetary value and also calculates the most “powerful” brands, as defined by the companies whose enterprise value is most positively impacted by the strength of their brand.

In order to determine a brand’s value, Brand Finance first evaluates factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation to determine the ‘strength’ or ‘power’ of a brand. Brand power determines the proportion of overall business revenue that is contributed by a brand.

The Middle East 
STC of Saudi Arabia moved up to 252nd place in the rankings, making it the Middle East’s most valuable brand. The company’s brand value rose 11% during 2016 to $6.2bn. The increase was primarily driven by STC ‘humanising’ its marketing campaigns, and reengaging with its stakeholders with a fresh, more personable outlook.

Despite an oil slump, the strengthened US dollar and global economic softening that has impacted consumer appetite for air travel globally, Emirates secured 264th place in the rankings with a brand value of $6.1bn. The company’s Brand Strength Index score even increased from 85 out of 100 in 2016 to 87 out of 100 in 2017, securing it a AAA rating once again. 

Brand Strength Index is the part of Brand Finance’s assessment, designed to calculate the underlying strength of a brand. It includes an analysis of marketing investment, brand equity (the goodwill accumulated with customers, staff and other stakeholders) and finally the impact of those on business performance.
Etisalat, the biggest of two telecom providers in the UAE, rose to 293rd place, up from 404th place in 2016. The company’s brand value increased 45% on last year to $5.5bn. The rise in value was on the back of growing user numbers, innovation (i.e. Etisalat was the first Middle Eastern brand to trial 5G) and strong profit results in 2016.  

Qatar National Bank, Qatar’s largest bank by assets, entered the survey for the first time securing 441th place with a brand value of $3.8bn. The company’s brand value rose 56% year-on-year driven by its continued robust financial performance and its successful international expansion. Qatar National Bank now operates in more than 30 countries across three continents.

Andrew Campbell, Managing Director of Brand Finance Middle East, said: “Middle Eastern brands continue to make their mark in the Global 500. The brand value of the four companies from the region represented in our 2017 ranking grew on average by 23% year-on-year, which reflects the scale of their achievements when it comes to driving brand awareness, recognition and advocacy. We expect more brands from the Middle East to enter our Global 500 in time as oil prices readjust and companies from the region continue to expand into new geographic markets.”   

Most Valuable Global Brands
Google replaced Apple as the world’s most valuable brand, with a brand value of $109.5bn. Google’s brand value rose during 2016 by 24% (from $88.2bn) whilst Apple’s declined from $145.9bn to $107.1bn. Google last occupied the position of the world’s most valuable brand in 2011. The company remains largely unchallenged in its core search business, which is the mainstay of its advertising income. Advertising revenues were up 20% in 2016 as budgets are increasingly directed online and Google finds more lucrative revenue streams from digital consumers. 

Andrew Campbell, continued: “Apple has struggled to maintain its technological advantage. New iterations of the iPhone have delivered diminishing returns and there are signs that the company has reached a saturation point for its brand. The Chinese market, where Apple has enjoyed a dominant market share, is becoming far more competitive with local players entering the market in a meaningful way. Samsung has also been successful in taking market share and financial analysts are projecting declining revenues and margins.”

Brand Power
Lego (196) has regained its status as the world’s most powerful brand, with a brand strength score of 92.7. Much of it success owes to its media licensing deals and partnerships which have driven growth and introduced the likes of Lego Star Wars, Lego Harry Potter and Lego Batman. The Lego Batman Movie will premiere in February with further movies planned for the franchise. This will contribute significantly to Lego’s already significant licensing income but, as importantly, the exposure – to both children and adults - will reinforce Lego’s brand strength for years to come.

Google (1), Nike (28), Ferrari (258) and Visa (57) complete the rest of the top 5 most powerful brands in the world, with the latter seeing an 8 percentage point gain in brand strength – the most of any company in the top 10.

Andrew Campbell, added: “A powerful brand can protect a company’s value during turbulent market conditions or challenging times for a business. The share price resilience of Samsung and Wells Fargo, after a difficult year, is testimony to how a brand can help a company ride out a storm. This is why a brand is such an important intangible asset and should be valued as such. Particularly during M&A scenarios, the fact that brand values are not factored into company accounts can mitigate against fair value being paid. Sellers ought to recognise the full worth of their brand, whilst buyers ought to factor in how far the asset of a brand can be stretched and monetised.”

Sector Insights 
Financial Services
Financial services companies comprise 20% of the Global 500 and, this year, China has been the big winner. Growth in brand value in China can broadly be attributed to the growth of the Chinese middle class and its maturing consumer economy. 

The brand value of Wells Fargo (13) fell 6% after a turbulent year for the brand and was replaced as the most valuable financial brand in the world by ICBC (10). However, it only fell 3 places on the overall ranking of most valuable brands, remaining the US’s most valuable banking brand, due to its deep roots across the country and its market share.  

Payment service providers Visa (57) and Mastercard’s (110) brand value grew by 81% and 58% respectively in 2016, as their core markets continued to move towards a cashless society and become increasingly reliant on the two companies’ services. 

Media 
Walt Disney (24) fell from the position of the world’s most powerful brand to number 6 in the power rankings. This may be because its 2016 Star Wars release was a spin-off and less successful than 2015’s reboot of the main franchise, one of the highest grossing films of all time. Furthermore, Disney’s biggest films of 2016 are all associated with sub-brands rather than Disney itself – Star Wars: Rogue One (Lucasfilm), Finding Dory (Pixar), Captain America Civil War (Marvel). 

Disney remains a hugely powerful brand and will be closely watched during 2017 when the eighth instalment of Star Wars is released and could propel the brand up the rankings again.  

Telecoms 
Of the 40 telecoms brands in the Global 500, AT&T (4) overtook Verizon (7) as the most valuable brand. Its geographical and acquisitive growth in South America and Mexico has been rewarded with continued growth in brand value and an increase in market share in the respective regions. 

Spectrum (83) is the highest new entrant of the Global 500. The brand created by Charter Communications which describes itself as the fastest growing TV, Internet and voice provider, counts the acquisition with Time Warner Cable and Bright House Networks under its name.

Non-alcoholic drinks
The behemoths of the non-alcoholic drinks industry, Coca-Cola (27) and Pepsi (67) have fallen by 13 and 12 places respectively as they continue to struggle against the trend towards healthier alternatives and greater scrutiny around marketing sugary drinks to children. Sprite (388) was the only of company in this category to grow its brand value over the past year (from $3.8bn to $4.4bn).

Brands offering energy drinks, appear to be protected as Red Bull (227) and Gatorade (372) continue to increase their brand strength rating (by 1 and 3 index points respectively) with their marketing efforts continuing to focus on extreme sports and performance athletes.  

Restaurants
The global fast food outlets McDonald’s (16), KFC (257) and Domino’s Pizza (427) continue to drop down the rankings in the world’s most valuable brands, with heavy competition in an increasingly fragmented market with healthier challenger brands offering greater choice for consumers. McDonald’s has fallen by 4 places in the rankings with its brand value decreasing by 9%, while KFC and Domino’s Pizza declined by 27% and 16% respectively. 

The largest improvement within the sector, with a 45% increase in its brand value, came from Tim Horton’s (192), the fast food restaurant based in Canada, known for its coffee and doughnuts. Parent company, Restaurant Brands international, which also owns Burger King (329), has announced plans for expansion abroad with the Philippines and the UK tipped to be targets.

Aerospace & Defence
Boeing (78) and Lockheed Martin (193) were big gainers in brand value in 2016, rising by 17% and 32% respectively, while Northrop Grumman was a new entrant to the Global 500 at 418. In an increasingly uncertain world and with a newly elected President committed to military spending, American defence and aerospace companies have benefitted. 

Conversely, Airbus (153) has been a big loser within the category. Its fall in brand value of 10% can be linked to the poor reception of its latest model, the Airbus A380, the company’s failure to meet some orders and reductions in staff.

Posted by : Saudi Arabia,Riyadh, Jeddah, Dammam, Meccca and Medina PR Network Editorial Team
Viewed 11029 times
PR Category : Banking & Investments
Posted on : Thursday, February 2, 2017  9:57:00 AM UAE local time (GMT+4)
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