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Criteria for consideration
Interbrand has valued around 5,000 brands covering every business sector, around the world, over the last 20 years and retains a clear position as discipline leader and innovator. This wealth of practical knowledge provides the basis for all of our league tables, at a global and market specific level.
In order to arrive at a particular ranking, we first establish clear criteria for inclusion. This ensures we have the required information to complete the valuation and that the brands conform to the geographic or industry specific nature of the study.
For the Top Taiwan Global Brands study, Interbrand formed a specific set of criteria:
- The brand owner must be a publicly traded company
- The brand has to be originated by Taiwanese companies, and owned by Taiwanese companies or by a company headquartered in Taiwan.
- The reference to “Taiwanese companies” also includes overseas associate companies within its group
- The brand has to have at least one-third of brand revenues generated out of Taiwan
- The brand must have at least 20% of revenues from its own brand versus OEM
Methodology
The Interbrand method for valuing brands is a proven and straightforward formula that examines brands through the lens of financial strength, importance in driving consumer selection, and the likelihood of ongoing branded revenue. Our method evaluates brands much like analysts would value any other asset: on the basis of how much they’re likely to earn in the future. There are three core components to our proprietary method, as follows.
Financial analysis
Our approach to valuation starts by forecasting the current and future revenue specifically attributable to the branded products. We subtract operating costs from revenue to calculate branded operating profit. We then apply a charge to the branded profit for capital employed. This gives us economic earnings. All financial analysis is based on publicly available company information. Interbrand culls from a range of analysts’ reports to build a consensus estimate for financial reporting.
Role of brand analysis
A measure of how the brand influences customer demand at the point of purchase is applied to the economic earnings to arrive at Branded Earnings. For this study, industry benchmark analysis for the role the brand plays in driving customer demand is derived from Interbrand’s database of more than 5,000 prior valuations conducted over the course of 20 years. In-house market research is used to establish individual brand scores against our industry benchmarks.
Brand strength score
This is a benchmark of the brand’s ability to secure ongoing customer demand (loyalty, repurchase and retention) and thus sustain future earnings, translating branded earnings into net present value. This assessment is a structured way of determining the specific risk to the strength of the brand. We compare the brand against common factors of brand strength, such as market position, customer franchise, image and support.
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