A CLOSER LOOK INTO THE PROGRESSIVE NATIONS IN TERMS OF THEIR BRAND VALUE
Brands have indeed come a long way from the phase of its inception. From being used as a method to identify cattle in farms to literally breathing life and distinctive identity in products, brands have accomplished, dictated and transformed several markets throughout the last few decades. As our world approaches the Fourth Industrial Revolution led by the fast-paced innovation in technology, big data analysis and Artificial Intelligence, the markets have also started to compete like never before. But if seen from a much bigger perspective, it is not just the brands that are fighting for the throne, but rather the countries where these brands hail from. Yes, in the long run the success of these billion-dollar brands eventually results in creating a greater, more optimized identity of its home country as brand. And that is the concept of Nation Brands – how countries perform as distinct brands and how their performance affects trade, politics and their culture as a whole.
This write-up serves as a concise overview of the report named “Nation Brands 2017” published by Brand Finance in October, 2017. Brand Finance has been operating since 1996 and is the world’s leading independent business valuation and strategy consultancy company. Understanding the value of a business has a number of benefits. For instance, an accurate company evaluation is essential for obtaining adequate insurance coverage, for selling a company, and for considering how much people should reinvest into a business. Consequently, if you require a business valuation chicago and other major cities are home to some fantastic accounting and financial consulting companies that are able to value your business accurately. That being said, of all the various whitepapers and reports published throughout 2017, this particular report looks into how local brands have boosted the reputation (or the polar opposite) of nations and how it has eventually had its effects on the global marketplace.
CHINA – THE RISE OF THE ASIAN SUPERPOWER
2017 has merely been a follow-up to China’s steady pursuit of global dominance. On the 2012’s National Congress of the Communist Party of China, President Xi Jinping declared that China’s brand positioning as a “country where the nations of the West shall come to make components for their own products” must be eradicated. Furthermore, he also insisted on the dire need of China to build its own world-renowned brands. And that was just the beginning. Fast forward to 2017, Chinese companies now make up 50 of the Global 500 most valuable brands. The change surely is surreal, considering the fact that they merely had 8 brands on the chart back in 2008. Chinese brands now dominate in four distinct sectors – banks (ICBC), spirits (Moutai), insurance (PingAn) and real estate (Dalian Wanda). Chinese brands and the transformed national image of China are both reinforcing each other as both tourists and investors are flocking there in numbers. As a result, the country is on its way to thrive both economically, politically and in socio-economic aspects as well. According to the research conducted for Brand Finance Nation Brands study, it has been revealed that China, as a brand, has an amalgamated brand equity of US $3.1trillion if compared to last year. If compared to other nations, then this amount equates to the entire brand value of United Kingdom as a whole. This clearly portrays how much of an unfathomable brand China is about to grow into in the years to come.
UNITED STATES OF AMERICA – THE “TRUMP” CARD
The United States of America is still reigning as the world’s top nation brand but it’s growth has been significantly low over the years. With an overall brand equity worth US $ 21.1 trillion but a growth rate of only 2%, the country might just face cut-throat competition from other nation brands in the not-so-distant future. Several issues have been related to the current stagnant situation of USA as brand, with the most significant one being the mass retirement of the baby boomers, which in turn slowed down the country’s holistic growth in terms of GDP.
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But, it is not just about brand equity, the United States seems to struggle with its brand image as well. Donald Trump’s administration has been known to be increasingly unpredictable. Disputes with multiple nations, closing borders for migrants and refugees and breaching global commitments in relation to climate change have all tarnished the country’s previously-held and carefully-crafted brand image of “being the leader in the globe and inspiring positivity to the developing nations”. Recovery from such a massive dilution in its brand essence will surely be a key challenge for United Nations to overcome in the upcoming years.
THE “EASTERN TAKE-OVER”
It’s not China that is growing at an unprecedented scale. Other Asian nation brands have also shown promise of significant growth over the years. While established European nation brands such as Germany, Belgium, Sweden and Austria start taking the back-seat, promising Asian nations rise to the occasion and have begun to proper at the speed of light. Nation brands like Vietnam, the Philippines, Thailand and South Korea have all managed to boost between 37% – 43% to their nation brand value. South Korea in particular seems to grow faster than its peers; thanks to its increasing involvement and rise in the memory chip industry and steel products shipments.
Singapore seems to be quite promising as well. With a Brand Strength Index of 92.9, it has established itself as the strongest nation brand of 2017. Much of the credit goes to Singapore’s huge investment in its citizens and their skills. The SkillsFuture movement initiated by the Government, every Singaporean aged 25 and above to secure S$500 for professional development. This growth of this platform has been phenomenal; with 379,000 people in 2015 to more than 400,000 in 2016. From giving out study grants to fellowships, this process of investing optimizing a nation’s human resource in order to enhance its potential surely proved to be fruitful for Singapore.
BRITAIN – THE BREXIT AFTERMATH
Britain has become the centre for all economic analysis, forecasts and predictions. Fresh off Brexit, the future of Britain as a brand would specifically depend on the UK government’s ability to steer clear from all the possible dangers and to smoothly drift away form the European Union; without inflicting any economic damage. With a current brand value of US $ 3.1trillion, the UK’s nation brand value would certainly be the one to keep an eye on; especially to witness either the dire effects of Brexit or the promising growth after Brexit settle upon the Queen’s Land.
ICELAND – THE ONE ON THE RISE
Iceland is the fastest growing nation brand of 2017, with an unmatched growth rate of 83% from that of 2016. Much of the accolade goes to a factor which is quite surprising – Game of Thrones! Yes, the phenomenal television show had to film many of its winter scenes in Iceland, and the country’s tourism sector has begun to skyrocket ever since. The country saw a record 1.8 million foreign investors in 2016 and the figure is expected to reach around 2.4 million by the end of 2017. Tourists who have gone to Iceland spent US$212 million in 2016 alone and that clearly goes to on to show the immense potential that Iceland has in terms of portraying their scenic, shivering beauty to the travelers and wanderlusts. “Winter is Coming” is for Game of Thrones. And for Iceland, tourists certainly are! With companies like Rent (https://www.rent.is/) providing camper van rentals and other facilities, the country’s attractive tourism sector is surely going to rake in some cash for the economy.
AND WHAT ABOUT US? – A PROMISING BANGLADESH
Much to the naysayers and the pessimists, Bangladesh did manage to make to the list and our progress is quite noticeable as well. Ranked in the 44th position in 2017, Bangladesh has successfully managed to rise 2 ranks up from that of last year. We are enjoying a growth rate of 22% from that of last year; but there’s still a lot of progress to be made, provided the fact that our neighbor India sits on the 7th position boasting nation brand value worth US $2,046 billion. But considering the fact that we’ve managed to successfully steer away from political turmoil, an ever-growing RMG sector and the recent technological advancements, the Asian Tiger surely has a long way to go.
THE “NATION BRAND VALUE” PROCESS
Now these observations of a nation being treated as a brand and then calculating its performance might seem unreal to many, but the methodology behind this clearly proves its effectiveness.
The entire method implemented by Brand Finance replicates the method based on the royalty relief mechanism employed to value the world’s largest companies.
The data based on which the calculations were done have been provided by the World Economic Outlook, World Economic Forum and fDi Intelligence.
The Brand Strength matrix was computed mainly on three pillars – “Goods & Services, Investment and Society”. These then expanded into further sub-pillars – Tourism, Market, Governance, People & Skills. These are then subdivided into individual metrics which are scored out of 100 and once accumulated, they accumulate to the overall Brand Strength Index (BSI) score of a particular country. Based on the score, each nation brand is then graded from AAA+ till D, similar to credit rating.
LAST WORDS
2017 has been a dynamic year with massive incidents taking place at various corners of the globe. From the unfortunate ‘genocide’ of Myanmar’s Rohingyas, Trump’s recognition of Jerusalem as Israel’s capital to North Korea’s nuclear program under Kim Jung Un – the world has witnessed both ups and downs. And these have had their fair share of effects on the nations as brands.
Lastly, it can be said that the report has successfully managed to incorporate all these global events all throughout 2017 has helped shape the identity of all the nations as brands. Some have managed to thrive while some unfortunately halted their cycle of progress. Regardless, Nation Brands 2017 has clearly shown what each of the nations and their home-grown brands are capable of; as George Brandis rightfully said “The arts are part of a nation’s identity, they are a part of a nation’s soul and when we look at a country from the eyes of people overseas they are part of a nation’s branding in the world as it were”. But today, it is merely not just the arts, but also the plethora of a nation’s brands, the mastermind CEOs behind those brands and the millions of employees working diligently for those brands that play a crucial role in bolstering a nation’s image as a brand in the global map.
BY FARHAT ZISHAN
ABOUT BRAND FINANCE
Brand Finance is the world’s leading independent brand valuation and strategy consultancy. Brand Finance was set up in 1996 with the aim of ‘bridging the gap between marketing and finance’. For almost 20 years they have helped companies and organisations of all types (including government institutions, trade associations and nation branding agencies) to connect their brands to the bottom line.
