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House, neighbourhood, empire: Brand architecture: What models are there? What are the advantages and disadvantages?
Brand architecture describes the strategic design and organisation of offerings, products, and brands within a company. It shows how they are interconnected and differentiated from one another.
Imagine throwing a stone into a lake. This creates concentric circles that spread out clearly. However, if you throw several rocks into the water at once, many circles are created whose connections are difficult to recognise.
The same applies when products and brands coexist without a clear strategy. It is unclear where messages and target groups overlap or how business models are structured. Brand architecture creates transparency here and defines how the various „stones“ interact. This allows you to specifically control the perception of your offerings and strengthen your company’s position.
Corporate brands represent a unified brand image that encompasses all of a company’s products, services, and activities. Customers, employees, sponsors, and suppliers instantly recognise the brand name and logo. This centralised system offers clear advantages, such as strong brand recognition, but also presents challenges.
Advantages:
Disadvantages:
Endorsed or subbrands are corporate, umbrella, or family brands that transfer the established image of a leading brand to various subbrands or product groups. This increases the credibility and attractiveness of these subbrands. A striking example is the European Union, where a standard label is applied to different nation-states.
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Disadvantages:
Individual product brands have independent brand structures, even if they belong to the same owner. Stakeholders‘ perceptions are primarily focused on the respective product brand, which shapes its own brand image. A vivid example of this is the nation-states on the African continent, which operate largely independently of one another.
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All three forms of brand architecture have their advantages and disadvantages. A suitable brand architecture always emerges from a holistic perspective, as it impacts various levels of a company. There is no one-size-fits-all solution. Selecting the appropriate brand architecture requires in-depth insights into the company’s structures. Human and financial resources must be considered, as must the relationships between supply and demand. In short, developing a brand architecture is a complex challenge.
Redesigning brand and sub-brand structures requires a careful approach, as incorrect decisions can lead to fault lines. At the same time, new offerings and business ideas continually create requirements that necessitate adaptation. In a dynamic market environment, companies are successful primarily when they keep up with the pace and flexibly reorient themselves—at least for now.
