Big brands can fall and rise – some do so more quickly than others.
Corporate negligence, a lack of business clout, preventable disasters, accidents and unforeseen calamities can all decimate the value of a company’s name – seemingly overnight, in some cases. Some recover but some do not.
Volkswagen is likely to have seen the worst-ever decline in brand value in the wake of the emissions scandal, according to an initial analysis by Brand Finance. The London-based agency estimates that the German car maker’s brand has lost almost one-third of its US$31 billion valuation.
There have been many other examples of brand disasters – and here are some of the biggest:
HSBC: from $28.5bn to $22.9bn
It emerged in recent years that HSBC subsidiaries allegedly acted as the “world’s local bank” to Mexican drug lords, rogue states, terrorists, money launderers and tax avoiders. And that, unsurprisingly, did not play out particularly well for its public image. According to Brand Finance, HSBC’s brand valuation peaked at $28.472bn in 2010, but fell to $22.865bn by 2013. “That currently is the biggest annual loss we’ve recorded,” says Robert Haigh, the marketing and communications director at Brand Finance in London, although he adds that VW’s decline is likely to overtake that. HSBC’s brand is now worth about $27.28bn, still below its peak.
BP: from $12.1bn to $8.8bn
“I’d like my life back,” the former BP chief executive Tony Hayward infamously said after the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. And shareholders wanted BP’s reputation back after the energy giant’s brand valuation plummeted from $12.11bn in the year of the crisis to just $8.75bn in 2011, according to Brand Finance figures.
BlackBerry: from $3.3bn to $691 million
It was once so popular that it was dubbed “CrackBerry”. But the Canadian smartphone brand BlackBerry did not prove quite so addictive, with its brand valuation cut by more than half as rivals Apple and Samsung stole the show. The brand was worth $3.3bn in 2012, but that fell to $691m this year. “It’s sort of like a reverse Facebook situation, where the critical mass is going in the opposite direction,” Mr Haigh says. Andrew Campbell, the managing director of Brand Finance Middle East, says that brand BlackBerry did not suffer for the same reasons as VW has. “The BlackBerry brand crashed because they were bad businessmen. They just didn’t see what was coming in terms of the iPhone,” he says. “You can blame them for being arrogant. But I don’t think you can say that they destroyed the brand through an event, like Volkswagen.”
Malaysia Airlines: from $1.05bn to $625 million
Two air disasters less than five months apart – the loss of the flights 370 and 17 – has weighed heavily on Malaysia Airlines. The airline saw a 41 per cent drop in its brand valuation, from $1.05bn in early 2014 to $625m at the beginning of this year, according to Brand Finance.
Toyota: from $27.3bn to $24.5bn
VW is not the only automobile brand to suffer serious losses. A series of recalls over mechanical issues saw Toyota’s brand valuation fall from $27.3bn in 2010 to $24.5bn in 2012, according to Brand Finance. It has, however, since recovered to be worth $35bn as of early 2015.
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