It is understandable and expected that the best brands of the world may not keep occupying their spot in the top 8 over 17 years.

Markets change, and so do consumers. The data from Interbrand.com, reveals some interesting insights on how and where these changes take place.

The top 8 best brands from the years 2000, 2004,2008, 2012, and 2016 (And the top 10 from 2017) were in this comparison.

What Best Brands tell us:

Tech Companies grow faster to become part of best brands:

Tech companies like Apple, Amazon, and Samsung have moved up 30 to 40 places in the list over this period. More importantly, they have increased their valuation significantly; e.g, Apple grew by ~30 times. Google had never made the list before 2005, and yet in the last 12 years, it has become one of the most valuable brands (number 1 according to the WPP BrandZ report) in the world.

Facebook has not even formed 17 years ago and it broke into the top 8 by 2017 (top 5 by 2018 according to WPP). These companies can bring in disruptive technologies, create their markets and capture value faster than anyone else.

Tech Companies also fall faster, and hard:

Nokia, one of the top 5 brands in the 2000s, lost significant ground in the smartphone war. The brand was eventually sold to Microsoft and replaced by the Microsoft brand name. What was astonishing was the time it took to get displaced from its throne. For tech companies, the risk of a new and disruptive player taking over is always significant.

Having said that, companies with a diverse portfolio and fast reaction time to market changes can survive disruption and benefit from that. Usually, new companies have to create an eco-system of their own to truly disrupt the market. Apple and Android did that relatively fast to take over the smartphone industry. Amazon Echo is doing it slower. For companies like Tesla, it’s even slower because of the complexity and gigantic size of their ecosystem.

Tech Companies capture more value:

Coca-Cola was the top brand for years before it lost its place to Apple. But it didn’t happen because Coca-Cola lost significant ground. It was a result of Apple and Google’s significant increase in value. In 2012, Coca-Cola and Apple’s valuations were similar. But just in 4 years, Apple’s valuation became 2.5 times of Coca-Cola.

Because of that, most of the top 8 brands are technology companies:

Only in 2004, 3 non-technology brands were in the top 8 brands list. Apart from that, in the years studied, at least 6 of the top 8 brands were technology companies. Tech companies capture mind share more than any other company. Consumers are more involved when interacting with a company like Apple than a company from the FMCG industry or any other.

Non-tech companies are harder to displace:

Because non-tech industries usually have lower involvement from consumers, they usually take more time to change. Because of that, it’s harder to move them from their leadership. Companies like Coca-Cola, McDonald’s, Nike, and Louis Vuitton may not have gained a lot on brand valuation, but they also haven’t lost much in bad years. As a result, Pepsi, KFC, or Adidas have yet to find a way to displace these brands from their place.

The best Brands of the world provide a good indication of how and where industries are shifting. It also shows how much time it takes for change to set in.

Originally published at https://www.linkedin.com.

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