Zara : a case study about brand valuation

Abstract

The 100 most valuable brands in the world increased their value last year by 3,7% to a total of USD 1,203 thousand million (based on Interbrand 2009 and 2010 database). This seems to be somewhat controversial given the financial crisis that we are experiencing. However, one may think that is especially during these times that there are the major opportunities for mergers and acquisitions. Following this, when we consider a transaction, the first issue that we think about is how determine its right pricing. Some assets, such as properties and raw materials, can be easily identifiable and converted into a monetary value. In turn, the brands, as others intangible assets, despite may be the most important assets
in many business, they cannot be explicitly valued. Hereupon, and motivated by the chance of ZARA’s brand acquisition by Hennes & Mauritz AB (H&M), we will try, along this dissertation, to find out a reliable way to calculate the ZARA’s brand value. Firstly, we are going to approach some essential concepts that are critical for a better comprehension of all the case study. Therefore, we will focus more on the topic of brand valuation. Our purpose is to describe the different motivations of brand valuation as its different approaches. The second major part of this work is the review of the Brand Rating, BBDO Brand Equity Evaluator® and Interbrand models. Every method will be presented in particular and afterwards critically assessed by means of the list of the compiled requirements. After these three analyses, we gather the conditions to select the one most appropriate to valuate ZARA’s brand. Due to the limitations present in all models, the brand valuation will be a long road of options and reviews. Nevertheless a monetary value will be reached and so, we will meet the requirements that enable to start the negotiations between buyer and seller.

Date of Award	2011
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Luis Pacheco (Supervisor)