What Company Has the Most Valuable Brand?
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Branding is one of the most effective marketing tools a company has. MillwardBrown Optimor and WPP calculate the brand value of hundreds of companies every year and, according to their calculations, the top five have a brand value of over half a trillion dollars! With a variety of effective marketing, these top companies have been able to establish not only a world-renowned name, but have also been able to reap the rewards in the market.
The brand that has taken the world by storm since its 1984 commercial: Apple Inc. (NASDAQ: AAPL). Apple Inc., is of course the American corporation that produces Macintosh computer products and the famous iPod, iPhone and iPad lines. The company has seen a tremendous growth spurt in recent years. There brand has an estimated value of about $183 billion dollars. Apple had their struggles and from 1986 to 1997, Apple ran into hard times and realized if they didn’t reinvent their brand and get Jobs back in the leadership role, they were going to fall. Jonathan Ive began designing the iMac in 1998 and at a later date, this designer would be the very man who designed the iPod and the iPhone, catapulting Apple back into the spotlight. Apple has certainly seen the rewards of this endeavor and the value of the stock reflects this. Apple stock is up about 70% over the last 12 months! Is there still value? Apple is enjoying a variety of big name investors supporting their brand. The likes of Leon Cooperman, Joel Greenblatt, George Soros and Ray Dalio are all buying up big when it comes to Apple, and frankly, we’re not surprised.
Sitting in the #2 spot with a brand value estimated at around $116 billion is IBM (NYSE: IBM). Of course IBM has been on the minds of millions of Buffett fans as he took an over $10 billion stake in the company late last year. The tech company went from being a major manufacturer of computers to a enterprise IT services company and kept its massive brand value. Buffett loves a company with a big moat.
Seeing as technology now makes the world go round, it isn’t a surprise that Google (NASDAQ: GOOG) would be another big brand here. Google was formed by two university students during their time at Stanford and what a gain for Page and Brin even with just 16% ownership. ‘Adwords’ is generating most of the company’s profits so far, which has led them to a position where they were able to offer their own product line of software, web browsing applications, browser operating systems and specialized netbooks for a very low cost. Investors like Leon Cooperman, Lee Ainslie, John Burbank and George Soros certainly understand their worth, and they all want a piece of the Google pie. Plus it doesn’t look like Google is going anywhere soon. Currently sitting at 10.40% up overall for the past year. But if you don’t believe these statistics, you could always Google it.
McDonald’s Corporation (NYSE: MCD) is definitely one very good example of effective branding. From a small barbecue restaurant that opened its door in 1940, McDonald’s has certainly grown in popularity to mammoth lengths. Now an international icon and family favorite, McDonald’s ‘golden arches’ are one of the most popular brands known worldwide. Not only that, but McDonald’s have forged themselves a nice little value on the stock market. Proudly boasting an increase of 3.43% overall for the past year, it comes as no surprise that big name investors like George Soros, Bill Gates and Bill Ackman are buying up shares in the hopes of enjoying Big Mac sized returns. So how did McDonald’s grow from a barbecue shack to their current state? Aside from cheap and convenient meals to fit a variety of lifestyles, McDonald’s simply has an excellent marketing campaign. With advertising that appeals to children, adults and the elderly alike, they focus on their ability to be able to provide ‘something for everyone,’ and it has certainly worked in their favor!
What do these three corporations have in common? By creating a brand that clientele recognize and trust, they have created empires in their industries. Branding leads to huge moats and high profit margins. Even if you have a lot of cash and a better product line than Apple's could you beat them in a few years? Probably not.
The Motley Fool owns shares of Apple, Berkshire Hathaway, Costco Wholesale, Walt Disney, Google, Netflix, Priceline.com, and Starbucks. mthiessen has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, International Business Machines, and McDonald's. Motley Fool newsletter services recommend Apple, Google, and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.