Wednesday, October 12, 2005

Brand Portfolio and Pareto Rule

1. To attract foreign equity, Vikay Mallaya has amalgamated all 8 group companies to form United Spirits Ltd. This will be the world's third largest spirits marketer. 30 brands out of an attractive 130 brands account for 90% revenues of the group. This reminds me of the Pareto 80:20 rule. But here it is 23% of the United Spirits Brands accounts for 90% of revenues. This has prompted pruning of brand portfolio in next fiscal.

2. We saw the same thing which fews years back in case of HLL. They narrowed down their focus from more than 100 brands to only 30 power brands.

So at the corporate level, business leaders have to prune their unnecessary bigger brand portfolio to managed and more profitable portfolio.

Do you guys have more example ??


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