“Globalization refers to an interdependent world economy in which people in one part of the world interact with people in another part as buyers, sellers, or intermediaries” (Keegan & Green, 2015).
If we apply this definition to the Global Brands can be understood in different ways. First of all, a homogenous taste amongst the consumers all over the world is emerging. The global brands are being favoured because of that, products now have the same characteristics in all the markets, fact that is also contributing to create a ‘worldwide image’ of the brand (Schulling and Lambin 2003). A clear example is the ‘Samsonite’ luggage brand, with a clear positioning all over the world, it sells travel products to people who seeks for quality and resistant suitcases willing to pay a high price in exchange for those characteristics.
According to Manteu (2008), Global Brands are adopting new leadership strategies as a result of the economies of scale and consequently, gaining competitive advantage over the competence. Addressing this concept to the LEGO company, as we will describe later, they were able to come up with a strategy related to this concept, they started to open new centres mainly in Europe, in order to get closer to the customers and save costs in different areas like transport and distribution (Oliver et al. 2007).
Finally, according to Schulling and Lambin (2003) there are two ways on which the companies can become global. The first case are the companies that started as ‘local brands’ and due to the success they became ‘global’. And the second one, the brands launched in a specific market environment.
We can relate the first case to Zara the fashion company that started in the North ...
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...s an increasing trend of healthier style of life, people tend to prefer those items instead of the original ones.
The LEGO company, also suffered from the cannibalisation of some of the products, as it’s reflected in the Lego case of study of 2014 the ‘Core products’ were cannibalised by the new ones.
Another disadvantage of the extensions could also be the fact that if it results on failure, the existing brand image could also be damaged (Hameed et al. 2014).
And finally, according to Keller et al. (2014), the failure of the extension can also result on the ‘Brand Dilution’, this is understood in the area of the consumer experience. Despite of the fact that it can attract new customers it can be perceived as negative by the loyal ones, specially with the high prestige brands. This is very common in the automotive field, where some brands have cheaper lines (BMW).
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