The desire to grow and improve performance leads companies to explore market opportunities and expand their product portfolio continuously. However, if the new market segment is partially or completely inconsistent with the brand’s current positioning, what strategic paths can companies opt for? There are four possible paths a company can decide to take, each with specific criteria, advantages, and conditions for realization:

  1. Creation of an endorsed sub-brand product line under the parent brand: This allows the company to enter the new segment in relatively short times and with medium levels of investment. At the same time, this route should only be pursued if foundational values are coherent with the parent brand that justifies the endorsement.
  2. Launch of a new brand, detached from the parent brand: This allows for the construction of the positioning and all strategic elements that make up the brand identity from scratch, enabling the company to “shape” a brand in total correspondence with a new long-term growth path. While on the one hand, this alternative might allow for the creation of even more value, on the other, it requires substantial investments and time to be realized.
  3. Acquisition of a brand that’s already present in the segment: If there is no coherent alternative in the brand portfolio for entering the new segment and if the desire is to manage everything in a relatively short time, the third alternative is to acquire an existing brand, to be managed in accordance with the identified vision.
  4. Foregoing entry into the new segment: This consists of choosing not to enter the new segment after thoroughly evaluating investments/risks/benefits. Tough choice, we know, still in some specific cases the right one.

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