A Research On Brand Extension Risk Management Of SW Company

Brand extension strategy has been prevailingly adopted and practiced as one of the most effective and efficient mode for striving business surge by companies around the world.Nevertheless,brand extension strategy still exists uncertain possibilities that it is not only promising positive benefits to business growth but also enticing company into risky situation if without proper or effective risk management system.This paper aims SW company as the case target,with collecting evidence from personnel interviews,data analysis and questionnaire surveys,demonstrating the complete brand extension implementation process,exposing crucial risk problems such as chaotic extension products without control,parent brand identity becomes vague,declined loyalty of parent brand and shrinking value of parent brand.Then follows applying the most updated risk management theories,with brand extension knowledge and most recent research achievements,applying identify,assess,manage and measure phases of risk management framework,indicating the causes of the problems in products extended over broadly,deeply and quickly,positioning parent brand identity inappropriately,careless on maintaining loyalty of parent brand and shrinking market share as well as losing market power.In the end,the author suggested that brand extension risk could bring negative consequences in some ways.Therefore,company should apply comprehensive risk management system before and during brand extension implementation,reduce extension products portfolio,elevate the depth of parent brand identity,retain the loyalty of parent brand and then maintain the core value of parent brand.