Developing and Implementing Dual Branding Strategy in Emerging Markets. A case study of Volvo CE and SDLG in Brazil

Abstract

Abstract Megatrends of globalization and urbanization is constantly changing the international business environment, and emerging markets are rapidly industrializing, followed by growing populations with increasing incomes. This in addition to comparatively weaker domestic competition, have created attractive business opportunities for western MNEs to expand business in these markets. Nevertheless, only a fraction of MNEs have managed to thrive with the opportunities, due to reliance on premium segmented products and exploring already established advantages. To meet the rising demand for value products from price sensitive customers, western MNEs have increasingly acquired emerging market companies as a prerequisite to implement multiple branding. From an academic perspective, studies have mostly focused on examining the challenges and benefits of such strategies, but have not explicitly indicated the process leading the companies to realize the opportunity of using such approaches. To examine the existing gap in this field, we conducted a case study on the development and implementation of dual branding strategy of Volvo CE and SDLG in Brazil. Based on our empirical findings, we realized that Volvo CE’s journey from China to Brazil demonstrates that developing a dual branding strategy is rather an emerging process than an intended setup, evolving through incremental learning. Throughout this process, the implementation of the strategy relies on the ability of balancing the creation of synergies and the differentiation of the two brands, as a too narrow gap increases risks of cannibalization, while a too loose gap leaves opportunities for competitors.