Europe and Japan are in crisis. And now it seems the crisis is rubbing off on their brands as well. In the recent Interbrand best global top 100 brands, there was not a single non-US brand in the top 10. Some of them do make an entry in the top 20 but it is hard to imagine that not a single brand from these geographies was in the top 10.
Why is this happening?
I am sure that 50 years ago Europe would have dominated such a list. And in the 80’s Japan was seen ruling the global business world.
To find answers to these questions, I put this up to the brand managers on LinkedIn.
The question did spark a healthy debate. It seems both Europe and Japan have lost the plot at least for now.
I came across an excellent theory supporting this in ‘The Black Swan’ written by Nicholas Nassim Taleb where he says that the socialist nature of Europe ensures that they support the older companies. Now this ensures that these behemoths survive but also closes the door at any newer company coming up. So in the last few decades no major companies have come out of Europe while the US boasts of mega brands like Google, Facebook and Amazon.
The US has made the mistake of protecting their Auto Industry and the result is that Chrysler had to be bailed out twice by the US government, once in the 80’s and once again now. GM itself is living on bailout money. Many banks have joined the bailout list this time as well and are not in the top ten either.
But Japan has a very different story.
Brendan Curley, a business development executive has an interesting insight to share. Japan he feels has traditionally has penalized creative thinkers. The ‘ringiseido’ system stifles creativity / innovation. He also goes on to say that the importance of family name and background makes it very difficult for a young entrepreneur to establish himself in Japan and well as Europe.
US brands on the other hand do not have these barriers.
There is adequate access to capital and Americans overall seem to be more concerned about the business benefit of a new idea rather than the relationship that comes along with a newer entity. Also five of the top ten brands come from one place only, Silicon Valley.
Also most of the top ten brands are technology brands and this is one area where the US currently dominates.
Some other factors that have helped the US definitely are a larger homogeneous market and leveraging the dominance of Hollywood as a brand builder. At some stage the process of brand management also originated in the US and hence that expertise has helped them build world class brands.
So the US dominates for now, and will continue to do so till the Chinese and Indian brands challenge them.
Some people will think that this is a far fletched thought, but then how many folks truly believed that India could host a F1 Race ten years ago? Currently there are no Indian or Chinese brands in the top 100.
But if Indian brands have to become top class what do they have to do differently? I would like to hear your views on that. All comments, criticism and suggestions welcome. Also can they leverage Bollywood for increasing their brand value?