Brand Architecture

Managing Brand Complexity: Staying Ahead of the Curve

Managing Brand Complexity: Staying Ahead of the CurveLarge companies—like GE, Google, Samsung and others—know this law of branding firsthand: As you grow in size, you will grow in complexity. Acquisitions, organic growth, market segmentation and product and service extensions all add complexity to brand portfolios. How should large successful brands such as these manage brand complexity?

Growing companies realize they need to support the strength and cohesiveness of their corporate identities, while also accommodating the needs of their individual brands and sub-brands. We call this “brand balance.” This balance gets harder to control as you grow; there is a very real complexity curve that gets steeper with a company’s size. To remain successful as you grow, it is important to learn how to stay ahead of this complexity curve.

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Brand Diversification: When Is it a Good Idea?

Brand Diversification: When Is it a Good Idea?In April I posted a SlideShare presentation (below) about tech startups and key brand considerations as they grow. In it I described Facebook’s decision to retain the WhatsApp and Instagram brands as part of a brand diversification strategy. Retaining acquired brands (rather than renaming and assimilating them into the parent brand) can be useful if they appeal to audiences, or deliver services that are not aligned with your core brand. While Facebook has 1.2 billion users, both Instagram and WhatsApp have hundreds of millions of loyal users. Since many of these users prefer these acquired apps over Facebook, it may make sense to keep those brands separate.

I also remarked that Facebook could continue to grow by following this type of diversification strategy, although it risks cannibalizing some of the popularity of its flagship brand. Now Facebook has publicly committed to this diversification strategy, which has been dubbed by some as “unbundling.”

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4 Questions to Ask About Your Brand Architecture as Your Organization Grows

4 Questions to Ask About Your Brand Architecture as Your Organization GrowsLet’s imagine you are Facebook. When you first started, you had a clear idea. You created messaging, a user experience and an identity platform to guide it as it grew. You made the hard decisions to whittle your brand’s message down into one clear, coherent thought.

But now, you’re acquiring additional brands at a very high cost, adding complexity to your brand. Now you’ve got Instagram and WhatsApp. You say you are committed to preserving their independence. We say it’s time to revisit those hard decisions, to keep your brand architecture intact and your brand strong.

Continuing to Build Your Brand Architecture
We see organizations—especially those in the technology and digital fields—take a “ready, fire, aim” approach to acquiring brands and working them into their brand architecture. As a result, any of the following situations may occur, creating a complex and unwieldy environment:READ MORE

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What Is Brand Architecture?

What Is Brand Architecture?One of the corporate branding disciplines that we receive the highest number of inquiries about is brand architecture. We find that for many clients however, it’s hard to grasp what brand architecture really means. Some organizations think of it as market segmentation, others think of it in terms of rationalizing portfolios or acquisition strategy. These are all important concerns, but we think about it at a higher level. Brand architecture explains the degree of relationship that should exist between the corporate brand and its various product and service brands. Should they go with a monolithic Master Brand strategy, corral multiple brands into a “house of brands,” or some combination of the two? What is the strategic rationale for an approach? Without clarity on these issues, your brand promise can become unclear, which creates confusion and can even reflect a lack of confidence.

The Root of the Problem
Anything that is ever created, whether it’s an app, a product or a service, wants a brand. And why not? Every creator wants to draw attention to his or her creation. By this philosophy, however, one company could easily have numerous brands. Companies often revert to micro-market segmentation as a surrogate for brand architecture. Google, for instance, has set an unusual precedent. The tech giant has many independently moving parts (read: brands) within its organization, but the sum total of those parts doesn’t necessarily create a comprehensive sense of what is “Google.” This is the most common problem we see with brand architecture.READ MORE

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Brand Impact of Mergers

The Brand Impact of Mergers

Last year saw a n ear-record high in M&A activity, which at $3.5 Trillion was the highest activity recorded in seven years, according to the New York Times. Tiny startups (WhatsApp: $19 Billion) and major blue chip companies (DirecTV: $49 Billion) were swallowed up by larger acquirers for astronomical sums.

The conventional wisdom fueling these buying sprees goes like this: once a company gets to a certain size, organic growth becomes very difficult to sustain. Acquiring into new areas or capabilities is a much faster route to growth in revenues, capabilities, and ideally profitability.

But what happens to brand value in these transactions? How should brands be managed to retain or augment their combined value? Which company gets to keep its brand name and promise, and what happens to the other? In our experience, too few companies invest in the upfront strategic thinking and decisions required to get full brand value, and hence business value, out of their mergers.

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