Brands As Acts Of Leadership, By Interbrand’s Nancy Villanueva
The latest edition of Best Global Brands confirms brands’ growing contribution to the business’ economic growth. Despite several months of swings in the financial markets, the report published by Interbrand shows a historic rate increase of 16% in the total value of the 100 most valuable brands in the world, for the first time surpassing the $3 trillion barrier.
It is important to note that more than half of this figure corresponds to the value of the top 10 brands in the ranking: Apple, Microsoft, Amazon, Google, Samsung, Samsung, Toyota, Coca-Cola, Mercedes, Disney and Nike. In other words, the value of the 10 most valuable brands in the world alone reaches 1.6 trillion dollars.
This group of highly advantaged brands dominates a business landscape that has changed significantly in the last ten years. In short, we are talking about a ‘superleague’ of companies with a key factor in common: the brand as the main asset and driver of growth.
Brands as possibilities
Traditionally, a business began with a product or service to address a unique and specific consumer need. Subsequently, a brand was built around that product/service and, taking advantage of the strengths of both, brands such as Coca-Cola or Colgate, among many others, became leaders in their categories and incremented their growth.
The focus today is quite different if we look at the trajectory of the firms that occupy the top positions of Best Global Brands. These corporations focus on the brand as the vehicle through which they address not only one need but a wide range of consumer needs through a differentiated portfolio or ecosystem of products, services and experiences.
As Professor Peter Fader (The Wharton School) says: ‘In the old days it was pretty easy to put brands in certain kinds of buckets based on what sector they were involved with. Today that’s becoming really difficult […] as companies start to think more about building strong relationships and doing it in a multidimensional way, it’s important for them to get out of their silo and no longer be tied to the thing that made them great or the thing that distinguished them from their closest competitor’.
The most valuable brand in the world, Apple, has used its affinity with customers to transcend its original category (manufacturing and distributing computers) towards new competitive spaces or arenas (financial, entertainment, health…) that allow it to remain financially solid and relevant among its different audiences. Amazon, for its part, evolved from an online bookstore to become the ‘store for everything’ while also entering the production of devices, media distribution or web services. Furthermore, Nike continues to sell sneakers, but its present and future go further with new products and services, such as the Nike Training Club app.
In short, this ‘superleague’ of companies acknowledges that its brands are extremely powerful narratives and experiences that can be applied in new spaces, thereby reaching broader consumer groups. Hence, the brand works as a growth asset that can be implemented in new and multiple areas as consumers understand in advance what they can expect thanks to the strong affinity that unites them with the brand.
However, today the role of brands goes even beyond growth or new possibilities. As global reputation studies confirm that citizens trust companies more and more – surpassing institutions and the media – social leadership becomes a main function of businesses and, therefore, of brands.
This situation explains the notoriety among consumers of brands that have been involved in the debates that flood society: Nike and diversity, Apple and privacy, Patagonia and sustainability, etc. The phenomenon represents a radical change from the past, in which brands preferred to stay out of the controversy to focus on the business.
Ultimately, the most important lesson to be learned for 2023 is that the most relevant brands will be those that seem to effortlessly balance power and responsibility. Consequently, they are not only engines of growth but also seamless acts of leadership.