A hundred, and scoring

Last week, IBM celebrated its 100th birthday. What a remarkable century it has been for the Big Blue! It has been one of the most dominant forces in the world of computing throughout the 100 years of its existence. With handsome annual revenues of $100 billion, it continues to remain a megabrand. This year's Brandz Survey of the World's most valuable brands ranks IBM at an amazing No. 3, just behind Apple and Google, but well ahead of much younger brands such as Microsoft, Vodafone and Walmart. Most importantly, brand IBM steps into its second century with youthful energy and intensity, and no sign of old-age ailments or fatigue.

Brand historians will ask: Has IBM drunk at the fountain of perennial youth, the holy grail that all brands seek? Contrast this with far younger brands. Nokia and Microsoft, born less than three decades ago, are grappling with shifts in technology which threaten their relevance. Legendary global giants such as Unilever and Colgate are struggling to find new sources of growth. Closer home, strong market leader brands such as BPL, Charminar cigarettes, Sumeet appliances and Ambassador cars either no longer exist, or are pale shadows of their former selves.

Yet in the midst of this constantly churning universe, centenarian brands such as IBM have stepped into their second century in fine fettle – large, prosperous, aspirational, young-at-heart. What explains their exceptional longevity and perennial youth?

To understand what underpins these remarkable centenarian brands, let us reflect on some striking examples in distinct categories. I have picked five names for this discussion: IBM, Tata, Coca-Cola, HSBC and Levi's. All these brands are more than a century old, yet they continue to dominate their landscapes today.

IBM

IBM, founded in 1911, has kept itself at the forefront of the computer industry for 100 years. It has managed this feat by transforming itself repeatedly. It began life as a company built for electrical reading machines and Hollerith cards, and changed during the 1940s to a business constructed around electronic calculating machines and magnetic tapes. Once again, in the 1960s, it shifted its business to mainframe computers. Then, in the 1980s, it quickly moved to assume leadership of the distributed personal computing (PC) world. Today, it has bet big on networks, cloud computing and analytics. Across all these significant shifts, brand IBM has remained remarkably consistent at its core: it has offered solutions to business problems using computing technology.

TATA

India's best known and most trusted brand was born in 1868. Three phases define its history. The first phase, until 1931, was the foundation, where the group established its spirit of pioneering and nation-building across some core industries. The second phase, until 1989, saw significant consolidation across key companies. The third phase, which began in 1990, has seen rapid expansion, with the brand boldly stepping into new industries and globalising itself. From the initial days of textiles, electricity and steel, Brand Tata now excels in several new-age fields including IT and computer software, automobiles, lifestyle and modern retail, telecommunications, chemicals, beverages and packaged goods. The brand remains true to its pioneering spirit and its promise of “leadership with trust”.

Coca-Cola

Founded in 1892, the world's largest brand of beverages is as strong as ever. From its origins in a single dark coloured drink, it now offers variants such as Diet Coke and Coke Zero, which appeal greatly to today's health-conscious consumer. Its ubiquitous bottle remains, but modern cans are now the preferred mode, including a recent 90 calorie smart mini-can. Coke is sold in over 200 countries, with nearly 40 per cent of its sales coming from rapidly growing economies such as Mexico, India, Brazil and China.

HSBC

Over the past decade, HSBC has been repeatedly ranked as the world's most valuable banking brand. It began life in 1865, as the HongKong and Shanghai Banking Corporation Ltd. Through a series of big acquisitions – Midland Bank (UK), Banco Bamerindus (Brazil), Republic National Bank of New York (US) – it is now present in 87 countries and four continents. With a wide array of contemporary products and services, it has striven to become “the world's local bank”.

Levi's

More than a century after it was first introduced in 1869, Levi's remains the world's favourite brand of denim and jeans. In the 1870s, it began by selling denim overalls. Fifty years later, it had launched jeans, leveraging the ranch craze of the 1930s. By the 1960s, Levi's had spread its appeal to a wide range of youth sub-cultures, including rockers, hippies and skinheads. Then, in 1986, it launched Dockers by Levi's, a smart office-wear brand. Then again, in 2003, came Levi's Signature, its affordable casual wear and jeanswear brand for today's youth and emerging markets. For many of us, Levi's is synonymous with jeans.

We can add some other outstanding centenarian brands to this list, including Cadbury, General Electric (GE), Mitsubishi and State Bank of India. But we must pause now to briefly discuss key reasons which have driven the remarkable success of these centenarians.

Size and Economic Success

To become a significant centenarian, a brand necessarily requires significant size, and many years of continued economic success. Without size, brands often tend to wilt away, yielding to larger players who enjoy great economies of scale. Long periods of economic success are essential to build cash reserves for poor years that are bound to intervene. To illustrate, IBM had a very bleak period in the 1990s, when mainframe revenues dropped precariously and losses of $13 billion piled up. But the company was large enough by then, and had saved enough cash, to withstand this collapse and formulate a fresh new growth strategy for itself.

Transformation

Centenarian brands have correctly identified big consumer, technology and economic trends, and transformed themselves repeatedly to leverage these new realities. IBM's transformation from electric readers to electronic machines to mainframes to personal computers has already been discussed earlier. Similarly, Brand Tata spotted the information technology revolution in India, the hunger for cars, lifestyle products (watches, jewellery) and branded staples (salt, tea) amongst upper and middle-class India, as well as the bottom-of-the-pyramid opportunity across several categories.

Consistency

While centenarian brands have transformed themselves, they have also remained true to their core, which helps build unshakeable franchise across generations. Levi's has always been the expert in denims and jeanswear, Tata about leadership with trust, and IBM has always emphasised business solutions using technology.

Globalisation

Most centenarian brands have developed global footprints. This is important, because over the course of 100 years and more, specific country economies rise and fall, and big new markets eclipse others. For example, if Coca-Cola had not expanded its presence to China, Brazil and India, it would not be anywhere as powerful today, and may have actually faced a decline. Similarly, if HSBC had not grown by acquisition to Europe and the Americas, it would perhaps have remained a small, unknown Hong Kong bank today. There are some exceptions to this rule, primarily in cases where the brand's home market has grown rapidly and consistently over many decades.

Institutions, not brands

A remarkable feature of centenarians is that many of them are not merely large and powerful brands, but institutions in themselves. Therefore, they tend to act like institutions do, which leads to their sustained longevity and success. All of us will agree that Tata is not merely a business, but a national institution that Indians look up to. Similarly, Coca-Cola and Levi's have assumed the halo of iconic institutions, transcending their status as commercial brands. Speaking about IBM, here is what Rosabeth Moss Kanter, Professor at Harvard Business School, has said in a recent issue of The Economist : “From the beginning, IBM had a concept of itself as an institution, not just a technology company.” Clearly, centenarian brands are much more than brands.

Harish Bhat is Chief Operating Officer – Watches, Titan Industries Ltd. These are his personal views.

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