Sunday, March 7, 2010

The power of brand equity, Microsoft case.

Have you ever looked through some financial data of Microsoft and asked about the value of brand equity of Microsoft? You will be very suprised about the huge power of this brand. In fiscal year 2009, the book value of Microsoft equity is only USD 39.558 billion. But its market value is USD 250.73 Billion. So, we can see approximately 6 times in gap. And our question is what factors made that huge difference between two numbers. Here are some following factors for this case:
1- Huge intangible assets such as corporate culture, customer loyalty, innovation, patents…
2- Brand equity – Brand name: Microsoft is the most widely recognized company in the world.
3- Microsoft consistent growth and met or exceeded the analyst consensus forecast.
4- High growth rate since 1986 up to now

But among these factors, brand equity plays the most important power. According to a estimate in August 2009, the brand value of Microsoft is about USD 76 Billion, ranked in second in the world, just after that of Google.

Even there are many different ways with many accompanied assumptions for evaluating one brand, we can not disagree with the strong power of Microsoft brand in the past, present and future.

No comments:

Post a Comment

Post a Comment