Stage 4: Brand Strength

Next, we implement a Brand Strength Analysis to determine the brand risk and discount rate attached to our brand. This provides us greater insights regarding the net present worth of Hang Ten.

There are 7 elements which we need to explore and evaluate to obtain a final value tagged to the brand strength of Hang Ten:

1) Leadership
The ability of Hang Ten to obtain market share and function as a market leader amongst the casual apparel industry. This is lowly rated at 3 because Hang Ten is not a market leader. It is a highly competitive industry with main competitor, Giordano, leading the segment.

2) Stability
Hang Ten's ability to hold on to customer loyalty and retain its brand image amongst consumers over a long period of time. Considering that breadth of brand awareness and its "value-for-money" proposition is relatively strong in the price-conscious consumers' minds, Hang Ten performs relatively well in this respect scoring 6.

3) Market
This measures if the casual apparel market Hang Ten competes in is stable and growing with ample opportunities and high entry barriers to ward off competitors. We rate this lower at 3 because the casual apparel market is saturated with many players competing for share

4) International Image
The extent to which Hang Ten has an international image, which would help boost its status as a strong and quality brand, through a wide presence in foreign markets and active exporting. Given that Hang Ten is headquartered in Hong Kong with ASEAN presence, Hang Ten's internationality is not in question. However, the Singapore market does not seem to believe its international image, hence, the lackluster brand image and performance. With these considerations, we scored Hang Ten a 5.

5) Trend
Hang Ten's ability to remain relevant and up to date with consumers' tastes and preferences. Currently, Hang Ten has much to improve on trendiness and relevance. A conservative estimate puts Hang Ten at 3 in this respect.

6) Support
The extent to which the Hang Ten brand receives organisational support through investment and advertising to help build and sustain the brand. Unfortunately in Singapore, the Group does not provide much resources and focuses instead on its bigger South Korean, Taiwan, Hong Kong markets. Resource leverage is low and so support is rated 3.


7) Protection
The strength of Hang Ten's legal protection of its trademark. Hang Ten scores high on this with 8 because its brand elements are controlled by Hang Ten Group Limited in Hong Kong and has a robust legal protection system.

As we can see, Hang Ten's current brand strength is poor and has a lot of room for improvement. This in turn results in a high discount rate which means that there is a high opportunity cost of capital in investing in Hang Ten.