From Making to Meaning

Europe’s Opportunity to turn Product Excellence into Brand-led Value.

The way a geography creates its most distinctive value often defies its clichés.

The US's edge lies in the ideas it licenses: services, software, cultural IP.¹ In Asia, the most distinctive value-creation logic is cross-industry system integration, though the model varies from Tokyo to Seoul to Shenzhen.²

And Europe? Surprisingly, Italy's largest export is not fashion, it is precision machinery.³ France's is not luxury, it is aerospace.⁴ Spain's is not apparel, it is automobiles.⁵ The UK earns more from pharmaceutical exports than from its music industry.⁶ And Germany? Reassuringly, exactly what you'd expect: automotive, machinery, chemicals.⁷

Europe makes more than the world gives it credit for and captures far less of that value than other major economies. A key reason is brand, which often remains a byproduct of excellence. "Make it well, and they will come" appears to be the instinct even in companies that invest heavily in it: manufacturers, banks, service firms, and tech companies alike. The product leads, the brand follows. I have seen it firsthand, across countries and over fifteen years: the C-suite treats brand as an identifier, a cohesive mark, a communication platform at best. Rarely as a value creation driver.

Yet, in the US, brand accounts for an estimated 43% of S&P 500 market capitalisation.⁸ In Asia, the most valuable companies have made their brand the organising logic of vast ecosystems. Both have understood what brand can do when treated as a strategic asset. It defends pricing power, creates experience-driven loyalty, and builds competitive moats that no spec sheet can replicate.

Salesforce and SAP compete in adjacent markets. SAP had the technology and the client base to own the category. It never made the brand do more than identify the product. Salesforce understood that the brand itself could reshape how companies think about customer relationships. Twenty-seven years younger, it now rivals SAP in financial scale. In Asia, Alibaba started as a marketplace and became the gateway to integrated worlds spanning cloud, payments, and CRM. Despite technological, regulatory, and geopolitical disruptions, its structural ambition goes far beyond what most European tech companies operating in far calmer waters have ever attempted.

SAP is not an exception. It is the pattern. Why does Europe, home to some of the most sophisticated companies in the world, leave so much brand-led value on the table?

Three DNAs, Three Trajectories

Three DNAs, each shaped by the geo-industrial context in which companies are born, explain why Europe's gap between value created and value captured is the widest, and the most self-inflicted. Economists call it path dependence: initial conditions influence trajectories.⁹

The Forge. This DNA was built in Europe through the industrial revolutions, powered by centuries of artisanal tradition. From Siemens turbines to Hermès saddles, from BASF chemistry to Campari spirits: companies whose brands were built as seals of superior making. The Forge carries a dimension of ingegno, the creative intelligence at the heart of European humanism. Manufacturing as cultural practice, physical and digital alike. The Forge is a mindset: the instinct that value is created in what is made, rather than in how it is presented. But when making defines a company's essence, everything else feels secondary. This is how the brand, as a strategic, value-creating asset, became one of Europe's most neglected opportunities.

The Theatre. US post-war cultural hegemony shaped this DNA. Hollywood, Madison Avenue, Silicon Valley: industries built to cast audiences in a cultural script. The brand leads, the product follows. Nike sells the narrative before the shoe. No other DNA creates value faster when the cultural current runs in a company's favour. The Theatre's vulnerability is structural. When that current shifts, there’s no more reason to believe.

The (Silk) Road. This DNA scaled in Asia following the logic of the trade route: the value lies in what you connect. The Japanese keiretsu and Korean chaebol operated as vast ecosystems for decades, powered by unique governance models.¹⁰ What changed with companies such as Xiaomi and Huawei is what the brand represents. These companies were built so that the brand itself becomes the interface through which hundreds of millions of IoT devices are experienced as a single ecosystem.¹¹ Though when Xiaomi puts its logo on a suitcase (no connectivity, no data, no ecosystem) the platform reveals itself as something older: a trusted unifying mark on a commodity product. The line between ecosystem brand and branded house is thinner than platform evangelists admit.

These three DNAs transcend the region or the sector that best symbolises them. They are starting points. The most successful companies layer elements of all three. What differs is the entry point: the founding instinct that shapes how a company approaches value creation. The Forge earns recognition through what it makes, and that remains the most concrete foundation. The Theatre commands adhesion through narrative, the Road through integration. Each carries fundamentally different strategic and managerial implications.

The Stretch Test

Companies under constant pressure to grow explore expansion into new meanings, new identities, or new categories. Each DNA carries a natural affinity with where to stretch. A brand's symbolic scope, whether Cult, Lifestyle, or Solution, among others, shapes how that stretch is expressed and how far it can credibly reach.¹²

Pirelli has manufactured tires since 1872. Through the Calendar and Formula 1, a company in a commoditised sector built a brand that transcends its category codes into performance and status, without leaving the category. The core remains the tire. The stretch is one of meaning.

Harley-Davidson managed to monetise far beyond motorcycles through rallies, events, and the Harley Owners Group. The stretch is one of identity. The brand became a Cult, building one of the most powerful communities globally. When its credo is contradicted, as with the push toward electric, the foundation cracks. And when the community itself loses adhesion with younger generations, it shrinks from the outside in.

Yamaha, founded in 1887 making musical instruments, now spans motorcycles, marine engines, and industrial robotics. Engineering provided the capability. The brand's reputation for performance and reliability provided the credibility. The stretch is one of category.

In my view, the stretch that fails most often is the one the company believes it has earned through competence alone, without asking whether the brand can carry it. This, sooner or later, dilutes brand meaning, and with it, value; as the examples of Philips, Remington, and Toshiba confirm.

The Right Moment, the Wrong Instinct

The playbooks that defined the past three decades of globalisation, borderless platform scale and unconditional cultural export, are losing their universal pull. This is a structural shift, and it favours Forge companies. The specificity that once looked like a narrower competitive basis becomes a source of distinction. The Forge was never meant to be a platform or an ideology. It was built to transform raw materials into objects of superior quality. Each unique story of transformation is a credible starting point of any evolution. The opportunity is to build on it: to layer system thinking and cultural stance onto the foundation that already exists, to leverage brand as the mechanism that captures incremental value across broader experiences.

The pattern playing out, however, is the opposite of what the moment demands.

When a Forge company does not build its own system, the brand risks being absorbed as a component into someone else's. Brands representing excellence carry real meaning built on heritage, craft, and specialisation. That is precisely why they are invited in. The trade offers returns: visibility and reputation. But it is asymmetric. Forge companies lend their brands' strength and receive stature in return. Over time, the component benefits the system more. Rarely the reverse.

Lavazza has been making coffee for over 130 years, with genuine expertise in blending and roasting. Starbucks, a younger company with weaker product credentials, created its own system: venues, rituals, membership, language. It finally entered Italy with much fanfare, borrowing the vocabulary of Italian espresso but selling an experience Italians barely recognised, and stayed. As an Italian, that stings: the national coffee culture lost relevance in its own country to a foreign system, not to a better product. Why? Lavazza's coffee is served in the world's finest hotels and restaurants, but the experience is owned by the venue, and that overshadows the maker.

Leica's cameras shaped the visual language of the twentieth century, starting with Cartier-Bresson and extending into an entire visual culture. Sony, starting from a weaker position in imaging, built an ecosystem spanning cameras, gaming, entertainment, and audio, where each domain reinforces the others. Leica had the cultural heritage to anchor something equivalent, perhaps more powerful. It never did. Xiaomi welcomed Leica as an ingredient inside its own ecosystem. The company that once defined how the world was seen now lends its brand as a feature line on someone else's smartphone product page.

Sennheiser has been engineering reference-grade audio for nearly eighty years. It now competes with Beats and with Apple itself through AirPods, both built on cultural edges that have nothing to do with audio superiority. AirPods Max have been essentially unchanged since 2020, but the ecosystem keeps evolving and the revenues follow. Sennheiser sold its consumer division in 2021. Its audio now lives inside Mercedes cabins, reinforcing someone else's narrative and experience.

The mindset remains the real block. When Forge companies enter markets rooted in different DNAs, or when the context shifts, they often replicate their own approach at larger scale. A bigger store in Shanghai is still a Forge-minded company store. A new product is still marketed as a Forge-minded company product.

As a European Millennial, the Nokia story remains my most vivid teenage memory. What was an iconic object until 2007, when the company held 49% market share, became irrelevant five years later, and the market share with it. The company kept treating the phone as a product category. Others treated it as the entry point to an ecosystem, or to a new way of living with technology, and their approach still leads today.

Companies with Theatre DNA face the mirror-image risk: when cultural adhesion fades, the narrative has no floor. Nike's recent struggles partly stem from this dynamic. Companies with Road DNA face their own fragility: ecosystems optimise for volume, not for value. Xiaomi spans hundreds of products, yet the brand borrows its premium credentials from others to justify its own. The difference is that for Forge companies, the gap is mostly self-inflicted: the capability is there. The intent is not.

Conclusion

For eighty years, Europe has largely followed the American cultural model. Today, that alignment is no longer automatic. And Asia never fully embraced it, with China the starkest example. Domestic brands are rising and competing internationally, even as geopolitical tensions create new constraints on their reach. Both models are under pressure. The question of what Forge companies' brands represent is becoming urgent. But it must start from their own DNA.

The Forge competes on product. Often, it wins. A superior product alone, however, cannot carry a company into meaning or capture its full value. In markets where value is increasingly shaped by experience and system-level thinking, what remains untranslated into brand stays under-monetised.

The shift starts with governance: treating brand as the mechanism through which excellence becomes visible and scalable. No board would approve a €200 million plant without a business case. Most approve brand investments with nothing comparable. Brand defaults to a cost line, and costs get cut. Marketing is left owning tactics and cosmetics. No one owns the brand as a company-wide asset.

European leadership already applies world-class discipline to R&D, supply chain, and capital allocation. Brand is the one strategic asset that receives none of it. Given what these companies build, the value left on the table is extraordinary. If the discipline extends to brand, the gap closes. If it does not, someone else will capture what Europe creates. That pattern is already underway.

Notes:

¹ BEA, U.S. International Transactions and Investment Position, 4th Quarter and Year 2025; World Bank, Charges for the use of intellectual property, receipts (Multi-year, current US$).

² Korea Exchange (KRX), market capitalisation composition data, 2025; Forbes 2025 Global 2000 List; Tokyo Stock Exchange / Japan Exchange Group, market capitalisation composition data; Xiaomi Corporation, Annual Report 2025; BYD Company, Annual Report 2025; Tencent Holdings, Annual Report 2025.

³ MAECI, Statistiche relative all'import export di merci dell'Italia, 4/2026.

⁴ Gouvernement, Résultats du commerce extérieur 2025.

⁵ Boletín Economico ICE, El sector exterior en 2023.

⁶ HMRC, UK Trade Info, 2025.

⁷ Statistisches Bundesamt (Destatis), 2025.

⁸ Landor analysis on market capitalisation S&P 500, 1976–2024. See Marazza & Compagno, in Saviolo (2025), The Power of Connection (Bocconi University Press).

⁹ Path dependence: Paul David (1985) and W. Brian Arthur (1989).

¹⁰ Miyashita & Russell (1996), Keiretsu: Inside the Hidden Japanese Conglomerates.

¹¹ Xiaomi Corporation, Annual Report 2024.

¹² Saviolo & Marazza (2013), Lifestyle Brands: A Guide to Aspirational Marketing (Palgrave Macmillan), and Saviolo (2025), The Power of Connection (Bocconi University Press).