Country Branding Challenges and Solutions

Development of Countries
Human Asset Management
Business Strategy

Bloom Consulting Country Brand Ranking ©
2011 TRADE - TOP 25 Performers Edition

Bloom Consulting © 2003 - 2011 contact@bloom-consulting.com / +34 91 308 0286 (CET) Page 01

2011
TRADE
Development of Countries TOP 25
Human Asset Management Performers
Business Strategy Edition


Bloom Consulting, has created this World Ranking in order to answer the fundamental
issue at the heart of every country, corporation and soul: how does one become attractive?
Luckily, the rationale behind such a question for a nation is quite simple.
A country wishes to draw the interest of people in order to create wealth.
In other words, the purpose of country branding is to bring economic growth.

Bloom Consulting © 2003 - 2011 countrybranding@bloom-consulting.com / +34 91 308 0286 (CET) Page 01

2011
TRADE


As a result of every country branding individual strategy, foreign direct investment
(FDI) net inflows worldwide from 2005-2009 were $7.8 trillion. During the same period,
FDI inward stock worldwide experienced an 11% annual growth rate.

The Asian and Latin American countries have grown significantly, at a rate of 17%
and 14% respectively, followed by European and African countries which have grown
at a lower rate of 13%. This is a remarkable figure for Europe as they hold 53% of world
FDI net inflows from 2005-2009.

In absolute terms, Europe has been able to attract the vast majority of global trade
inflows, followed by the US. US inward stock is the highest in the world, about
6.7 times the size of African inward stock.


2011
TRADE

Introductory Note
A word from our CEO

It is essential for countries to realize that the image a nation projects has a significant impact on
the economy as a whole. The country brand strategy you convey will undoubtedly affect the
way your country is perceived. The current global financial crisis has proved this. For instance,
we can now see how credit rating agencies are highly influencing external perceptions about
countries and more importantly the strong impact they have on a country’s economic perfor-
mance. The interesting fact is that how these ratings are calculated are not in the public domain,
but rather the speculative effect they have is; it has proven country branding is more than a
capricious political idea, but rather a definite national necessity countries now need to face and
manage as a priority. Countries can no longer afford to allow third parties to play with their
national asset – their brand.

Traditional country branding studies and rankings have used public opinion and stereotypes in
order to draw conclusions. Bloom Consulting has created the first study which captures the
links between the image a country projects and the effect this has on the country’s success. We
have merged macro and micro country facts and statistics, and correlated them with the commu-
nication strategies conveyed by every country in the world. This has enabled us to reach deeply
meaningful conclusions that mathematically prove that positioning your country in a specific
way will have a direct impact on your GDP. Such consequential conclusions are what other
studies in the past have lacked.

This report will help you understand the delicacies of country branding. It will let you compre-
hend the current situation worldwide, and which communication strategies should be empha-
sized or ignored. It will unearth the regional complexities in this global competition, by unleash-
ing the truth behind how a country is perceived and the way it can differentiate itself in the
international arena.

We sincerely believe that this report will expand your knowledge on how to brand your country,
and will contribute to guiding your country down the path to success.

José Filipe Torres - CEO of Bloom Consulting


2011
TRADE

Country Branding Current Challenges
Bloom Consulting “3T” Approach ©

The main objectives for creating a country brand strategy rely on three main areas:
T1- Attraction of Trade
T2- Attraction of Tourism
T3- Attraction of Talent

The traditional approach to face these challenges is to create, or simply improve, perceptions
of the country both domestically and internationally.
Most of these initiatives are developed under one umbrella strategy.
This means countries try to create one single strategy for 3 different objectives.

However, the ideology and objective behind each one is simply different and ultimately will not
work; the 3 objectives are completely antagonistic. As an illustrative example, one cannot com-
municate leisure and entertainment to investors at the same time as communicating a qualified
and hardworking workforce to potential tourists. They automatically repel each other, therefore
destroying their core objective. Most of the time, what countries try to do is reach a compromise
to better understand the objective of the overall country brand strategy.

T2

Objective
T1 T3

Fig. 1 - Bloom Consulting's ‘3T’ Approach ©
Bloom Consulting’s country branding methodology separates these objectives, trade, tourism
and talent and treats them individually, not as an umbrella strategy. Thus, we are able to derive
growth projections and calculations in order to better understand the objective of the overall
strategy (see Fig. 1).


2011
TRADE

The Research
Understanding the research methodology

One of the key differences in the
Bloom Consulting Country Brand Ranking©
and Bloom Consulting Country Brand Rating©
is the use of facts and official data as opposed
to surveys and interviews. It combines hard data,
such as economic indicators and country characteristics,
along with communication strategies, giving birth to the
Bloom Consulting Algorithm.
A consistent use of official and recognized sources

More than one source of information has been used throughout this project to elaborate the
global ranking. The United Nations (UN) provided a comprehensive list of 193 countries*,
which enabled us to avoid any bias in selecting and identifying specific territories.

The economic variables selected to measure the performance of the countries were taken from
the World Bank (WB). This ranking uses 2009 data, the latest data available from all sources.

The communication strategies used by countries to attract FDI were taken from the Investment
Promotion Agencies (IPAs) of the respective countries associated with the World Association
of Investment Promotion Agencies (WAIPA).

When these IPAs were not accessible through the WAIPA, information was gathered
from embassies or chambers of commerce.
It can therefore be confirmed, that through the consistent use of official internationally
recognized sources, the data used is current and accurate.
*Hong Kong has been added to the list as Bloom Consulting considered the specific nature of the territory and the importance of its
economic variables. Treating them separately allows us to analyze the real potential of both Hong-Kong and China respectively.


2011
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The Research
Understanding the research methodology

A revised and validated use of data

With these sources at our disposal, we collected the country brand strategy information
of each country in order to understand how the country brand wishes to be perceived.

Naturally, the quality of the data used throughout this project is crucial. For this reason, the
research methodology includes a two-step approach to checking the information. Only con-
firmed and official data through the World Bank, UNCTAD, and the United Nations has been
used. Moreover, all IPAs have been contacted by email and telephone in order to verify the
veracity of our information.

Our methodology assumes that the communication strategies used by IPAs are accurate.
We do not question their authenticity as this is not the purpose of the study, we are only inter-
ested in the impact they have on a countries’ economy. Even though some countries may choose
to promote aspects that differ slightly from reality, this behavior is rare and eventually would
have a negative impact on their FDI and their country branding

This study examines 144 countries; it was not possible to include all 193 countries supplied by
the UN. If a country did not promote any significant messages or if economic data was not
accessible, then they were eliminated from the study.

An explanatory and comprehensive clustering of communication strategies

All country branding strategies are heavily reliant on the chosen communication strategies
as they have a huge impact on the country's performance. Overall, more than 3,000 messages
have been collected from official sources, and implemented as a basis of information
throughout this report.


2011
TRADE

The Ranking

With the help of powerful multivariate statistical analysis tools, we successfully identified
correlations between a country’s level of success in trade and the perception that the country
projects through its communication strategy. Case-differential tables, as well as matrices,
were used to better comprehend the most significant relationships found, leading to the
Bloom Consulting Algorithm.

Hence, we present a ranking which positions
a country brand according to its economic performance
based on previous economic history and
the Bloom Consulting Algorithm;
a process which as yet, has never been done before.
It is safe to say that our research has indicated that countries lack differentiation when it comes
to attracting potential investors. It is also proven that the most popular communication strategies,
such as hard economic facts are not the most effective to attract investors. This provides a great
opportunity for countries to differentiate themselves.


2011
TRADE

The Ranking - TOP 25

Bloom Consulting Country Brand Ranking © Top 25 Countries 2011 – Trade

1. USA 14. Austria

2. Luxembourg 15. Australia

3. China 16. Italy

4. UK 17. Singapore

5. France 18. Mexico

6. Belgium 19. Sweden

7. Canada 20. India

8. Hong Kong 21. Hungary

9. Germany 22. Switzerland

10. Russian Federation 23. Saudi Arabia

11. Netherlands 24. Japan

12. Spain 25. Turkey

13. Brazil

The list of top country branding performers is mainly composed of the US, European coun-
tries, BRIC countries, and Asian economic hubs. No African countries appear on the list, and
there is only one country from the Middle East region, Saudi Arabia.


2011
TRADE

The Rating
Bloom Consulting Country Brand Rating ©

The country branding rating factor is derived from the
Bloom Consulting Algorithm which is designed
to recalculate the rating factor depending on the eco-
nomic performance and the communication strategy
chosen by each country.

Therefore, we can conclude that the Bloom Consulting
Algorithm cannot be manipulated by any single action.
Bloom Consulting has created the Bloom Consulting Country Brand Rating © in order to
evaluate the effectiveness of a country‘s chosen communication strategy.

The relationship between communication strategies and economic wealth varies substantially
between geographic locations and economic development stages. Therefore, these factors, along
with the number of countries within each region and the repetition rate of each message within
each communication strategy, were taken into account. This ensured that we could derive an
accurate and just algorithm in order to designate each country with a rating factor, a country
coefficient detailing the effectiveness of its communication strategy.


2011
TRADE

The Rating

The Bloom Consulting Country Brand Rating © scale has classified the rating factors into
7 categories according to the effectiveness of a country’s communication strategy.

Bloom Consulting Country Brand Rating © Categories Rating

Major positive impact Triple Green

Moderate positive impact Double Green

Minor positive impact Single Green

No impact White

Minor negative impact Single Red

Moderate negative impact Double Red

Major negative impact Triple Red


2011
TRADE

The Rating – TOP 25

This rating reflects the effectiveness of the top 25 performers chosen communication strategies.

Bloom Consulting Country Brand Rating © Top 25 Countries 2011 - Trade Rating

USA China France Brazil Australia Singapore Mexico Japan

Luxembourg UK Hong Kong Russian Federation Austria Sweden Switzerland

Belgium Germany Netherlands Italy India Turkey

Canada Spain

Hungary

Saudi Arabia

The top 5 country branding performers have all achieved high positive rating factors; however
so have other countries located further down the ranking. Countries such as Japan, Mexico, and
Singapore all have a top rating due to the use of the most effective communication strategy.

On the other hand Saudi Arabia and Hungary both received negative rating factors despite
making it into the top 25 global ranking. This is because even though they attract a lot
of investment, they could be using a more effective communication strategy in order
to increase FDI.


2011
TRADE

The Country Branding Strategy
How the world is differentiating itself

50% of all countries tend to use the same type
of communication strategy regardless of geographic
location. The majority choose to communicate messages
related to investment incentives, strategic location,
and the ease of setting up a business.

The extent to which countries make use of messages, which messages they communicate,
and the number of messages they use among other key facts, varies greatly from region to
region. Most countries use different strategies when branding themselves.

Country branding differentiation can be achieved through the various messages a country
decides to communicate, all with the same intent, attracting FDI. In particular, the level of differ-
entiation varies from country to country. There are countries that have a high or low differentia-
tion rate based on the communication strategy they use, which allows us to see how many other
countries use the same communication strategy.

The most popular communication strategies worldwide are also the most popular communica-
tion strategies within every region. All of the messages in Table 1 have been used in communica-
tion strategies by more than 44% of countries worldwide.

Table1. Most popular messages used in a country‘s communication strategy; World
1. Favorable Fiscal Policy 63%
2. Investor Friendly Environment 63%
3. Favorable Strategic Location 61%
4. Qualified Workforce 53%
5. Social Political Stability 44%


2011
TRADE

The Country Branding Strategy
How the world is differentiating itself

In fact, using popular messages does not guarantee a positive impact on the country branding
strategy; actually, it’s the opposite; the most valued messages according to the
Bloom Consulting Algorithm © factor are not the most popular.

Table2. Most valuable messages used in a country‘s communication strategy; World
1. Social Welfare
2. Market Size Characteristics
3. Legal Framework Characteristics
4. Available Workforce
5. Soft Economic Characteristics

Communication strategies related to social welfare are the most valued in the international arena.
Countries that decide to communicate social benefits, education, and security would rate highly.
Other valued messages help to communicate the soft aspects of a country such as stability, a safe
investment environment, innovation culture, as well as no corruption, legal transparency, and
a positive legal financial climate.

The communication strategies mentioned above are the ones that work best in the global arena.
However, we know that a regional approach is needed and that the most valuable messages in
each communication strategy vary from continent to continent. In Europe and Oceania, innova-
tion and quality of life are the most valuable messages, whereas in Latin America, the most
valuable message is related to economic growth. Asian countries also value growth and they
include innovation in their most valuable communication strategy. Finally, African countries
tend to value low-cost and qualified workforces in their communication strategy.


2011
TRADE
Development of Countries WORLD
Business Strategy Ranking

2011 TRADE - WORLD Ranking

As opposed to surveys and qualitative interviews, this country brand ranking combines
the countries economic performance with the respective country branding strategies;
a process which as yet, has never been done before. Such combination of variables has
given birth to the Bloom Consulting Algorithm - which sets the world Ranking
World Rank Rate

1. United States of America

2. Luxembourg

3. China

4. United Kingdom

5. France

6. Belgium

7. Canada

8. Hong Kong

9. Germany

10. Russian Federation


2011
TRADE

World Rank Rate
11. Netherlands

12. Spain

13. Brazil

14. Austria

15. Australia

16. Mexico

17. Italy

18. Signapore
19. Sweden

20. Hungary

21. India

22. Switzerland

23. Turkey

24. Saudi Arabia

25. Japan
26. Egypt

27. Poland

28. Ukraine
29. Colombia

30. Nigeria

31. Kazakhstan

32. Chile

33. Peru

34. Israel

35. South Africa


2011
TRADE

World Rank Rate
36. Indonesia

37. Romania

38. Argentina

39. Thailand

40. Malaysia

41. Czech Republic

42. Pakistan

43. Portugal

44. Republic of Korea

45. Denmark

46. Bulgaria

47. Lebanon

48. Finland

49. Sudan

50. Jordan

51. New Zealand

52. Cyprus

53. Iceland

54. Croatia

55. Serbia

56. Morocco

57. Greece

58. Slovakia

59. Tunisia

60. Algeria


2011
TRADE

World Rank Rate
61. Republic of the Congo

62. Philippines

63. Iran

64. Oman

65. Estonia

66. Dominican Republic

67. Costa Rica

68. Panama

69. Lithuania

70. Ghana

71. Democratic Republic of Congo

72. Bahrain

73. Belarus

74. Trinidad and Tobago

75. Uruguay

76. Syrian Arab Republic

77. El Salvador

78. Iraq

79. Bosnia and Herzegovina

80. Yemen

81. Madagascar

82. Georgia

83. Latvia

84. Jamaica
85. Guatemala


2011
TRADE

World Rank Rate
86. Malta

87. Bangladesh

88. Slovenia

89. Zambia
90. Honduras

91. Montenegro
92. Albania
93. Bahamas

94. Cambodia

95. Uganda
96. Armenia

97. Sri Lanka

98. Uzbekistan

99. Botswana

100. Ireland

101. Mongolia

102. United Republic of Tanzania

103. Nicaragua

104. The Forerm Yugoslav Republic of Macedonia

105. The Republic of Moldova

106. Senegal

107. Angola

108. Barbados

109. Ethiopia

110. Afghanistan


2011
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World Rank Rate
111. Mauritania
112 Gabon

113. Antigua and Barbuda

114. Mauritius

115. Seychelles

116. Paraguay

117. Kenya

118. Cape Verde

119. Cameroon

120. Liberia

121. Fiji

122. Saint Lucia

123. Guyana

124. Djibouti

125. Mali

126. Saint Kits and Nevis

127. Belize

128. Benin

129. Kuwait

130. Grenada

131. Saint Vincent and the Grenadines

132. Papua New Guinea

133. Lesotho
134. Malawi

135. Sierra Leon


2011
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World Rank Rate

136. Swaziland

137. Dominica

138. Maldives

139. Rwanda
140. Gambia
141. Burundi

142. Zimbabwe
143. Vanuatu

144. Azerbaijan


2011
TRADE

About
Bloom Consulting

Bloom Consulting is a strategy consulting firm specialized in country branding.
José Filipe Torres founded Bloom Consulting in 2003 and is a regular spokesperson at confer-
ences and universities worldwide. He has been interviewed by both The Economist and Forbes,
where he was identified as one of the top 3 country branding experts in the world.

At the moment Bloom Consulting have offices in Bulgaria, Brazil, Italy, India, Portugal and
Spain (headquarters), as well as research centers in Tokyo and London. Bloom Consulting work
closely with presidents, monarchs, ministers and institutions in order to define their strategy,
establish their vision, and implement it. Bloom’s clients include the Bulgarian, Latvian, Polish,
Portuguese and Spanish governments, and also regions such as Madrid, Castilla y Leon in Spain,
and Alqueva and the southwest regions of Portugal.

Bloom Consulting has developed a 3T approach © to separate Trade, Tourism, and Talent
strategies. One fundamental point for the success of all of Bloom Consulting’s country brand-
ing projects, is the CAMPRO methodology ©. This methodology is a combination of academic
and professional knowledge under Bloom Consulting’s management and control, key to obtain-
ing the most accurate recommendations and insights for all clients.

More information

While this report provides a general global overview, the information presented here is anything
but a glimpse of the findings we have at our disposal. Please do not hesitate to contact us if you
would like a catered and detailed version of the Bloom Consulting Country Brand Ranking ©
report for your country or region.

For more information, please visit:

www.bloom-consulting.com/country_branding_ranking
www.bloom-consulting.com/country_branding_rating

or send an email to countrybranding@bloom-consulting.com


Country Branding Challenges and Solutions

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