Brand system

The competitive advantage of a powerful brand from a value-orientated point of view clearly is the acceleration and reduced volatility of future cash flows.

Strong brands are able to enhance incoming cash flows on the one hand and reduce capital expenditure on the other hand.

The difference between incoming cash flows and brand-related expenditures defines the brand value added cash flows. These cash flows are discounted with an appropriate rate and yield the brand related shareholder value added.

The goal of any brand is to win loyal customers, who are willing to pay a price premium and thereby increase the amount and reduce the volatility of cash flows.