How Brand Portfolio Diversity Can Mitigate Competitive Environment Effects on Firm Performance

In this paper, the relationship between a firm’s competitive environment and brand portfolio diversity is examined. Specifically, by adopting a strategic management stance, brand portfolio diversity is positioned as a moderator that can be increased or decreased to attenuate the negative main effects of market turbulence and competitor intensity on firm performance. Data for consumer goods and services firms were obtained from two sources: surveys and financial statements. The results show that, although an environment characterized by a high degree of market turbulence and competitor intensity has a detrimental effect on firm performance, these effects can be attenuated to the extent that a firm develops a highly diverse brand portfolio.