Many perceive the concept of growth as something that is a very straightforward. However, there are a multitude of factors that need to be taken into consideration when developing a growth strategy for your company and brand. One aspect of growth that some tend to overlook when trying to expand is strong partnerships. Through partnerships, your company can team up with other powerful and driven companies to achieve that common goal of growth and recognition. Brand licensing is exactly that, a powerful partnership, an exceptionally viable growth strategy when done thoughtfully and with the right partners.
But how does it stack up against other traditional growth strategies?
Grow or Die
Today the pressure to grow is unrelenting. Decision-makers seek it. Investors insist on it. Customers are buoyed by it. A growing company exudes confidence, prestige, and acceptance. People want to work for companies that they feel are going places, literally and figuratively. In part, that’s psychological. But, as McKinsey’s research shows, it’s also because there seems to be no alternative. Companies that are not growing are declining.
Companies pursue growth strategies for all sorts of reasons. They expand to incorporate new strengths; add new activities; explore new territories; become more competitive; explore potential; escape convergence, saturation, stagnation or commoditization; and much more. Too often though, as Laurence Capron observes, the motivation for growth is being able to claim growth, or at the very least evolution. Perhaps this is because managers feel they have little choice in the matter. “Companies must continually evolve to stay relevant, innovative, and competitive.”
Welcome to the Expansion Riddle
Companies are under pressure to grow, but every action, and therefore every option, comes with risk. Standing still is dangerous, especially in dynamic sectors, but so is staying in one market, and so is diversifying into other markets. And size does nothing to lessen the riddle. As Marc Emmer says,
“The larger the core business the harder it is to diversify, because a new business must grow at many multiples of the existing business to contribute enough margin to reduce [concentration] risk.”
In my guide, Brand Licensing Versus Traditional Growth Strategies, I elaborate more upon growth and why brand licensing can be a viable growth strategy as it eliminates some of the risk associated with the pursuit of growth. Let’s talk about some of those risks:
Growth is Not a Sure Thing
For all its popularity, growth is far from a sure thing. The global management consultancy, Bain, asserts that in recent times 90 percent of companies worldwide have failed to achieve sustained, profitable growth. They cite three common reasons for this:
Companies fail to even come close to realizing the full potential in their core business.
Companies diversify too far in pursuit of fast growth.
Companies fail to redefine their core successfully, meaning they quietly rot.
Nevertheless, it is imperative to carefully think about a growth strategy, and which direction to take, in order to grow in a manner that is appropriate for your business.
What You’ll Learn in My Executive’s Guide To Deciding What’s Right For Your Brand
- The pros and cons of brand extensions
- Striking the right balance between the four elements of a successful extension: Involvement, leadership, coherence, and enhancement.
- The 10 powerful consumer motivations you should take into consideration when planning a growth strategy: Familiarity, momentum, immediacy and more.
- Examples of obvious licensing examples (NFL apparel, Star Wars figurines) and not-so-obvious ( Rubbermaid branded closet storage, Mr. Clean cleaning buckets).
- Growth benefits of licensing–with numbers backed by industry studies and polls.
- Insights into what makes a brand licensable
- A vetted 5-factor framework that will help you decide whether your brand is a candidate for successful licensing.
- My proven 4-step method for selecting categories for licensing.
- How to avoid brand over-extensions that confuse customers and damage the core brand.
- The brand licensing process for the licensor.
- Success stories of brand growth through licensing.