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1. Introduction
Manufacturing corporations with multiple brands represent a corporate strategy aiming beyond an organization with merely one brand. The strategy has become popular because of its ability to offer a wide array of products to customers with different needs (Aaker, 1996; Sköld and Karlsson, 2007, 2012). Thus, a multiple brand manufacturing corporation can be described as an entity in which different interests such as business mission, business strategy, market positioning and brand values are mixed together into a common structure.
The incentives behind building larger structures with many brands are financially and operationally motivated. From a revenue side, market breadth is important to attract different target groups from increased global brand presence (Prats et al., 2012; Schiele and McCue, 2006). It is also important to commercialize new products at a higher speed than before (Eisenhardt and Martin, 2000; Nevens et al., 1990). From a cost side it is desirable to reduce costs from various types of synergies (Capron, 1999; Seth, 1990b). Cost reducing synergies may occur in different shapes (Amit and Livnat, 1988; Chandler, 1990; Panzar and Willig, 1981; Seth, 1990a, Tanriverdi and Venkatraman, 2005) and in various parts of an organization such as in manufacturing, development, distribution, purchasing and retail (Chandler, 1990). Synergies are realized when undivided resources are divided (Teece, 1980, 1982), such as between products across brands (Meyer and Mugge, 2001; Muffatto and Roveda, 2000). Thus, wider mixes of products from multiple brands may increase synergies from economies of scope, and provide opportunities for reduced costs from economies of scale (Sköld and Karlsson, 2007, 2012). The balance between scale and scope can hence be described as balancing specialization in terms of individual product and brand values and market strategies with interests of commonalization from using potentially common assets such as resources, processes, and management styles.
However, becoming “bigger” is also associated with challenges (Brennan et al., 2015). One is to balance synergies within and across different products and brands to contribute to group performance while also securing unique and differentiated products and brands at other levels within the group (Lundbäck and Karlsson, 2005; Sköld and Karlsson, 2011). Another one is that increased market scope also needs to be adjusted in relation to synergistic motives in R&D and production...