Brand Extensions Differentiation: Implications for Strategy
The purpose of competitive strategy is to create and sustain competitive advantage. Traditionally, this is done by finding a favorable opportunity in a well-defined market and creating relevant differentiation. In this framework, brand extensions can represent a favorable opportunity for developing a winning competitive strategy. However, a competitive strategy that is not based on meaningful differentiation of brand extensions leads to a transient competitive advantage. The solution proposed by this article is centered on creating brand extensions that provide momentum for the brand, yield positive energy, enhance differentiation and further intensify core brand associations. Furthermore, brand extensions should provide new features that transcend product category boundaries, thus increasing product functionality, reliability and capabilities. From a competitive point of view, brand extensions should decrease rivalry among competitors by establishing dominance on an untapped criterion of purchase.
brand extensions, differentiation, competitive advantage, competitive strategy.
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