Title: Aligning Brand Portfolio Strategy with Business Strategy
Abstract: IntroductionAlthough many business owners claim that the brand is the company's most important asset, very few companies have actually integrated the brand strategy with their business strategy, the company's vision with the brand vision, the business development process with the brand extension process, and their company's values with their brand values (Urde, 2003). This paper outlines the opportunity for developing dynamic brand portfolio strategies, aimed at expanding and nurturing the firm's business strategy.It is suggested that a brand building perspective should be gradually replaced by a leverage-focused brand portfolio framework, with a more inclusive approach to brand management, where brands outside the corporation's legal border are also treated as an intrinsic part of the brand portfolio (Hill and Lederer, 2001).Further, insight regarding the intersection of business strategy and brand portfolio strategy is strongly emphasized a brand strategy is driven by an overarching business strategy. According to Aaker (2014, p. 156), the dynamic nature of the business strategy will require continual modifications to the brand strategy in order to make it more relevant for the business strategy: because the brand portfolio strategy is driven by a business strategy that is dynamic, there is an ongoing necessity to modify, augment and change the portfolio and its strategy.While it is important to align the brand strategy with the business strategy, living out the brand promise in relation to the business promise can in reality require very careful thought. One important point of departure can be to conceptually demarcate this area as an intersection between business strategy, brand strategy and market opportunity, as described in Figure 1. For instance, a company can have a vision, mission and an effective business strategy and might want to address a new market opportunity. This could however, in some instances, necessitate the creation of a new brand.Consider Toyota Motor Company, which sells a wide range of motor cars under various sub-brands (brand strategy) to meet different needs, but with families as the broad target segment (business strategy). However, when identifying a new market opportunity in the super-premium segment in the same strategic group as BMW, Mercedes and Maserati (revised business strategy), this had an entirely different market segment, brand promise, value proposition and distribution channel, the solution was the creation of a new brand-Lexus (revised brand strategy), thus leading to a house-of-brand form of brand architecture. Here, the brand portfolio framework was modified to be in harmony with the new business strategy.In this paper, four key approaches to a more progressive and dynamic brand portfolio strategy are introduced:1. Aligning brand portfolio objectives with business objectives;2. Business development through brand extensions;3. Business expansion through brand acquisition; and4. Brand alliances as energizers of business strategy.Aligning Brand Portfolio Objectives with Business ObjectivesA business vision should articulate core ideas of the business and its overarching purpose. According to Richard Branson, there should be reciprocity between the business vision, the business units and the brand strategy: You do need to develop an overall vision for your company - one that is strongly supported by a more targeted strategy at each business that falls under your umbrella. The two things are not mutually exclusive, but complementary. One should not override the (Branson, 2014).In the case of Virgin, a corporate branded house strategy energizes new business units based on global recognition of the corporate brand. From a brand management perspective, Virgin creates strategic fit with other units in the business portfolio through descriptors aligned with the corporate brand. …
Publication Year: 2015
Publication Date: 2015-09-01
Language: en
Type: article
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Cited By Count: 4
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