This paper provides an empirical investigation of the
effects of brand portfolio strategy on shareholder value
and risk. Although previous research has shown that
Branded House strategies in which all firm offerings are
presented using the corporate umbrella brand generate
higher values of Tobin’s q than House of Brands
strategies in which separate brands are cultivated, the
risk profiles of these alternate portfolio approaches
have not yet been considered. Additionally, previous
research ignores important nuances in brand portfolio
strategy that are made salient when considering
strategic variations on pure Branded House (BH) and
House of Brands (HOB) strategies: namely, sub-branding
and endorsed branding. We address these gaps by
estimating the Carhart four-factor financial model to
assess three components of shareholder value (levels of
returns, systematic risk, and idiosyncratic risk) and
relate them to five strategies along the brand portfolio
continuum: branded house, sub-branding, endorsed
branding, house of brands and a hybrid strategy
including some combination of these. pdf 2010
