Brands portfolios and competitive advantage: an empirical study

Abstract

Purpose

The paper seeks to contribute to the understanding of brand portfolio management by examining the brand portfolio strategies of four leading cosmetics companies. The research focuses on two questions: what reasons lead companies to develop, or not, a brand portfolio strategy, and how brand portfolio management can create a higher and stronger level of competitive advantage that is harder to grasp and imitate.

Design/methodology/approach

The paper utilises an exploratory approach by means of case studies. Data were collected from the following companies: L'Oréal, Clarins, Estée Lauder and Wella. The research involved in‐depth interviews with 33 company directors.

Findings

The research results show that an aggregation of brands is not in and of itself a brand portfolio. The juxtaposition of brands is one of the elements, but not the sole element, necessary for the development of a brand portfolio, which is a combination of a brand ensemble and key factors born out of organisational savoir‐faire.

Research limitations/implications

The results validate the existence of a link between brand portfolios and competitive advantage, a link based on the existence of four key factors identified in the research.

Practical implications

A model is proposed to assist managers in better understanding and controlling brand regrouping, because the research illustrates the benefits for a company that executes well‐coordinated brand management.

Originality/value

This research fits into the complex context of strategic/marketing relationships and broadens the field of brand analysis, notably its strategic dimension. The contribution of this research is to show how a brand portfolio can create a stronger and higher level of competitive advantage, which is more difficult to copy.

Citation

Chailan, C. (2008), "Brands portfolios and competitive advantage: an empirical study", Journal of Product & Brand Management, Vol. 17 No. 4, pp. 254-264. https://doi.org/10.1108/10610420810887608