Brand Portfolio Strategy: A book review by Bob Morris

Posted on: April 13th, 2011 by bobmorris

Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage, and Clarity
David A. Aaker
Free Press (2004)

Note: I read this book when it was first published and recently re-read it. If anything, Aaker’s insights are even more valuable now than they were then.

Aaker has earned and deserves his renown as an expert on branding. Perhaps you have read one or more of his previous books: Managing Brand Equity (1991), Building Strong Brands (1995), Developing Business Strategies (1998), Brand Leadership (with Eric Joachimsthaler, 2000), and Strategic Market Management (2001). In my opinion Brand Portfolio Strategy is Aaaker’s most important work…thus far. One of the most popular recent buzz words is “portfolio” which, insofar as strategy is concerned, is best understood in terms of diversity which creates or allows for options and opportunities otherwise unavailable.

According to Aaker, the brand portfolio strategy “provides the structure and discipline needed to have successful business strategy. A brand portfolio strategy which is confused and incoherent can handicap and sometimes doom a business strategy. One that fosters organizational and market strategies, creates relevant, differentiated and energized brand assets, and leverages those brand assets, on the other hand, will support and enable business strategy.” The brand portfolio strategy that Aaker advocates, therefore, creates relevance, differentiation, energy, leverage, and clarity.

There is a diagram inside the front and back covers of this book that illustrates precisely what such a strategy involves, and, what the various relationships are between and among its various components. (As I read this book, I found it helpful to refer back to the diagram occasionally as I would to a map throughout a journey. The same diagram also appears on page 17.) I appreciate the fact that Aaker illustrates each of his core concepts by examining various corporations’ successes and failures with a brand portfolio strategy, notably Intel, Disney, Microsoft, Citigroup, SONY, Dove, GE Appliances, Dell, and Unilever.

After having read the previous sentence, decision-makers in small-to-midsize companies may conclude that the brand portfolio strategy offers little (if any) value to them. That would be a mistake and I apologize if I inadvertently encourage anyone to reach that conclusion. Aaker’s quotation of a remark by Frank Lloyd Wright seems (to me) relevant both to the brand portfolio and to almost every organization, regardless of size of nature: “Always design [or redesign] a thing by considering it in its next larger context — a chair in a room, a room in a house, a house in an environment, and environment in a city plan.” That is as true for a family-owned automotive repair shop as it is for General Motors.

Whatever their size and nature may be, all organizations really do need to position themselves so as to be perceived in the marketplace as having relevance, differentiation, energy, leverage, and clarity. In this brilliant book, Aaker explains HOW to accomplish that. Those who share my high regard for this book are urged to check out Harvard Business Review on Brand Management, Kaplan and Norton’s The Strategy-Focused Organization, Godin’s The Purple Cow, Finzel’s Change Is Like a Slinky.

 

 


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