Say Tata post-Corus, and you have a truly global brand which will weigh about $9.1-9.2 billion in valuation.Say Tata, and you’d have a brand that’s in the Top 100 - in the same global power pack as a Hitachi ($9.1 billion in brand value) or a FedEx ($9.2 billion).Say goodbye to a home-grown, complacent brand. Say good morning to a steely new player, which could in brand value outpace iconic nameplates such as Ikea ($8.9billion), Merrill Lynch ($8.8 billion), Morgan Stanley ($8.7 billion), Goldman Sachs ($8.7 billion), Walgreen ($8.7 billion), and Chrysler ($8.6 bn).Yes, the Tata-Corus brand-value combine should also zoom past legendary brands like Oracle ($8.3 bn in brand value), Heineken ($8.3 bn), Canon ($8.1 bn), Philips ($8.1bn), Chevron ($8.1 bn). This Tata cheer is based on figures and extrapolations drawn from the just-released Brand Finance Top 250 Global Brand Value report.The Tata brand figures - pre-Corus - as the only Indian brand in the globe’s top 250, clocking in at No 103 with a value of US$7.4 billion.This is based on high-level brand valuation across its three engines of Tata Consultancy, Tata Motor, and Tata Steel, which account for about 80% of group revenues, says Unni Krishnan, managing director, Brand Finance India.This brand value is about 20% of its total enterprise value, says the report. It also reveals that the total value of the 250 most valuable global brands is over $2 trillion, accenting that brands now create significant economic value in all sectors, from utilities to finance. With Corus in the family, the overall Tata brand value is poised to jump a minimum of 25-30%, which decodes to a wholesome $9.1-9.2 billion in brand value. Next year, it could be rank under 90, and this may just be the start. The BF 250 brand value is worked out on the `Relief from Royalty’ approach. In essence, what would it have cost the company if it didn’t own the brand and had to rent it (royalty). ``The rise in value for the Tata brand will be very fast in the years ahead, driven by organic growth and M&A, which has been leveraged well not just globally, but also locally,’’ explains Unni Krishnan. What’s more, the penetration of Indian brands will increase very fast in this global Top 250 table in the coming four to five years, he predicts. ``I bet on a Wipro entering this league, with its acquisition-led, string of pearls strategy.’’ How come a Reliance didn’t make this grade? Well, it’s not as strong in terms of geographical footprint, intellectual property, or new product development, says Unni Krishnan. He also bullish on a Godrej brand finding its place in the sun, based on its strategy blueprint. So why does the Corus acquisition by Tata pack in such additional brand value? Answer: It brings everything from products, to capacity to geographical footprint and the heritage value of British Steel to the overall Tata brand furnace, say analysts.
The Corus brand itself is highly priced, with a high degree of equity value in European markets.It unleashes a huge pool of R&D and new technology for Tata Steel specifically. Here’s the twin advantage this combined brand offers: At the back end you have a low- cost base in India (Tata Steel), and at the front end a high-value delivery system which is the Corus brand. This combo will gives great margins to the business, backed by a stronger brand, says Unni Krishnan. In terms of business efficiencies, just having to rebuild Corus’ infrastructure would have cost Tata 60% more than what it dished out, says Ramesh Thomas, CEO, Equitor Consulting. Add customers, and the order pipeline, and it’s a good deal for the Tatas, he adds.The Tata brand values can kick in much more with the wider, global playing field of Corus. There is now scope to create and deliver much more value for the customer, reckons Thomas. The Tata brand itself was valued at about $5.5 bn in Brand Finance’s India brand survey last year, says Unni Krishnan. It was valued at a little over $6 billion in 2005 in an exercise undertaken by Equitor-Interbrand on behalf of the Tata group, says Thomas.They used the economic value process, which is based on the economic forecast of a company; the economic value of a firm and what per cent of that value comes from the brand. Question is, what propelled the Tata brand value (pre-Corus) from $5-6 billion to $7.4 billion in the short timeframe between 2005 and now? Unni Krishnan says that brand value reflects everything from R&D efforts to new technologies, new product activity, and M&A strategy, which was leveraged well - not just globally, but locally too. TCS, for one, has been getting into new areas of consulting, and into IP-related products. And Tata Motors has been driving its Indica and Ace brands forward, and so on.Underlying all this is the bedrock of heritage and values though. The Tata brand has stood for trust, transparency, and honesty. ``Value is not separated from values. Values drive financial value,’’ underlines Unni Krishnan.
SOURCE : DNA
The Corus brand itself is highly priced, with a high degree of equity value in European markets.It unleashes a huge pool of R&D and new technology for Tata Steel specifically. Here’s the twin advantage this combined brand offers: At the back end you have a low- cost base in India (Tata Steel), and at the front end a high-value delivery system which is the Corus brand. This combo will gives great margins to the business, backed by a stronger brand, says Unni Krishnan. In terms of business efficiencies, just having to rebuild Corus’ infrastructure would have cost Tata 60% more than what it dished out, says Ramesh Thomas, CEO, Equitor Consulting. Add customers, and the order pipeline, and it’s a good deal for the Tatas, he adds.The Tata brand values can kick in much more with the wider, global playing field of Corus. There is now scope to create and deliver much more value for the customer, reckons Thomas. The Tata brand itself was valued at about $5.5 bn in Brand Finance’s India brand survey last year, says Unni Krishnan. It was valued at a little over $6 billion in 2005 in an exercise undertaken by Equitor-Interbrand on behalf of the Tata group, says Thomas.They used the economic value process, which is based on the economic forecast of a company; the economic value of a firm and what per cent of that value comes from the brand. Question is, what propelled the Tata brand value (pre-Corus) from $5-6 billion to $7.4 billion in the short timeframe between 2005 and now? Unni Krishnan says that brand value reflects everything from R&D efforts to new technologies, new product activity, and M&A strategy, which was leveraged well - not just globally, but locally too. TCS, for one, has been getting into new areas of consulting, and into IP-related products. And Tata Motors has been driving its Indica and Ace brands forward, and so on.Underlying all this is the bedrock of heritage and values though. The Tata brand has stood for trust, transparency, and honesty. ``Value is not separated from values. Values drive financial value,’’ underlines Unni Krishnan.
SOURCE : DNA
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