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Brands are among the most strategic assets for global corporations, which is why companies spend so much time and money trying to develop them. Global corporations invest millions of dollars to create engaging brands with unique market positions, hoping to reap the long-term benefits of customer loyalty, price premiums, high switching costs and market leadership.

While brand investment is necessary, however, external economic conditions today can make it really challenging. As companies try to tackle the local and global competition, they need to expand the scope of their brands by targeting more customers across newer segments and broader markets, in part by offering a larger array of products and services.

How can global brands offer new products when they face a persistent global economic recession? Brand expansion is crucial for effectively competing against emerging brands, especially from surging countries in Asia and South America, but it also poses several difficulties. For starters, it can create a strong pull on the brand’s resource endowment and it can constrain a strategic management of the brand portfolio. Most importantly, brand expansion is difficult because it forces companies to compete on multiple fronts with a diverse set of competitors.

In addition to these obstacles, global brands must increasingly contend with rapid technological innovations that effectively cut down the shelf life of any given product. While earlier brands could carry on indefinitely with one or a few flagship products, just requiring minor tweaks to their product features every now and again, the current business landscape has higher demands.

Today, companies must come up with substantial improvements to existing products while also developing completely new products that incorporate the latest technology. They must appeal to a growing segment of technological patrons.

Given these challenges, how should chief executives and brand managers with scarce resources strategically strike a balance between attracting new customers with new products on the one hand, and better serving their current markets by exploiting the efficiencies of their current products on the other? In these tough economic times, are product launches a formula for brand growth and prosperity, or do they lead to brand suicides?

To answer that question, companies must evaluate the role of their current brands. All too often, as companies try to expand the strategic scope of their global brands, they focus almost exclusively on the competitive advantages of other industry players so they can tailor their own strategies and effectively compete. However, it is important for companies to look internally at their own brand portfolios before finalizing their growth strategies.

As brands expand with the launch of new products, it is crucial for companies to align their new products with their existing brands. One of the biggest downfalls is to create a brand portfolio that is too diverse, with individual brands that do not necessarily match up well with the corporate brand identity, the underlying brand value proposition and the market position. As such, the first step is for chief executives and brand managers to evaluate any new product or brand in the context of their current brand portfolio, and to ensure a strategic match.

Next they must collaborate to innovate. With the help of the Internet and technological advancements during the past few decades, millions of customers today can find solutions to complex problems and instantaneously share that knowledge with the world online. This easy distribution of knowledge has fundamentally altered the way that companies are approaching the processes of value creation and innovation.

In earlier business paradigms, companies invested millions of dollars, created dedicated innovation teams, set innovation targets and controlled the entire innovation process, from ideation to commercialization, in a very proprietary manner.

The new business paradigm, however, demands that global brands change this conventional way of innovation. In order to effectively grow in a time of economic recession, global brands should strategically leverage the distributed knowledge and collaborate to innovate.

This kind of strategy will help companies continue to expand their brands with only minimal in-house investment.

Martin Roll is a global business and brand strategist. His Web site is at http://www.martinroll.com.