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The key to developing the right brand portfolio is balancing how many brands you need to achieve your business ambitions against how many brands you can afford to support with the available budget.

Most marketers don’t wake up one morning and realize they have a problem with their brand portfolios. The vast majority of organizations have never explicitly considered how many brands they need (their portfolio) or the structure and manner in which those brands are viewed in consumers’ minds (brand architecture). Furthermore, despite the relative lack of corporate attention placed on them, portfolio and architecture issues are the primary source of brand pain and profit loss in most of the companies with which our brand consultant partners have worked.

In 2016, there were over 45,000 M&A transactions worldwide. With this number in mind, it’s staggering to learn that poorly conceived or executed mergers and acquisitions destroyed more than $200 Billion in shareholder value in a 20-year period. In fact, NYU Stern professor, Ashwath Damodaran, reported: “More value is destroyed by acquisitions than any other single action taken by companies.”

Mergers and acquisitions have long been a popular growth strategy for companies seeking to expand into new markets or territories, gain a competitive edge, or acquire new technologies and competencies. Yet when it comes to increasing shareholder value, M&As have historically achieved mixed business results at best. While many factors contribute to determining whether a merger makes sense and will ultimately achieve desired financial results, brands are often a crucial incoming consideration and a determinant of ultimate post-M&A business performance.