A person has limited energy, the same has an enterprise.
 

    When a lot of our Chinese enterprises enlarged, their brand extention speed is also fast, only without good effect. In my opinion, brand has very narrow limitation, that is to say, brand is definitely impossible for unlimited extention.  In the specific area, the brand is famose while in an unfamiliar area, the brand is nothing. So a brand can be called "brand" only in its familiar area.

 

    However, our Chinese enterprise keeps on extent their brands at will. For example, "Energy 28" originally is soap powder, and after its success, it extents to "Energy 28" water.  The "Energy 28" as soap powder is deeply rooted in consumers' mind so when they drink the "Energy 28" water, they can always feel that there are some bubble in the water. Another example is "Rongchang Pharmaceutical Factory", their "Bellybutton Sticker for Hermorrhoids" is very popular, but now they also promote "Sweet  Dream Fluid", and the consumers feel uncomfortable. Chengdo Enwei Group's Jie'er Yin is famous and its ad is "keep the secret and just wash", afterwards they produce "Hao Wa You Fluid", and the consumer wonder whether it can be drunk or not. It is just the enterprise's wild brand extention that leads to all the bad effects.

 

   The enterprise regard itself is famous enough to do everything. In fact, it doesn't work. And the wild brand extention can make the enterprise suffer a lot of invisible asset. If the brand extends in the right way, it can bring a lot of benefit. For example, ROBUST, extended from fruit milk to mineral water, and the first year's volume of sales reached over 400 million; YOUNGOR extended form shirt to business suit and the first year's volume of sales exceeded 100 million, becoming one of the top ten business suit brand.  This kind of brand extention is so successful that it can get twice the result with half the effort.

 

    A research shows that 95% of the durable consumer goods enter the market by brand extention. We should concern what can be extended and what can't, which way can extended to and which way can't and how risky. And we can get a ratio of the risk. At present, brand extention is a very big trap and some successful enterprise will be trapped if not well extended. Many enterprises nowadays tend to be of diversity and it is really very risky.

 

   One person has very limited energy, so has an enterprise. It will be great only you can do one thing well.

 

   However, our entrepreneurs are relatively impulsive. There are two kinds of situations. Before success, an enterprise should catch every opportunity and after, it should give up. Making good use of opportunity is very happy while giving it away is rather unwillingly. Like our human beings, we will try our best to pursue a beautiful girl, happily. After becoming lovers, it means that we can't pursue other girls. What a pity. Therefore, it takes great courage for enterprise to give up opportunity. A research on the western enterprises reveals that 72% of the successful enterprises focus on one product while 28% don't. And during the 28%, half are relatively diversified and half aren't.

 

    It has been showed that most of the enterprises can only do one thing. So we can't be too greedy. We should be willing to give up and know how to. Also, you should learn to be adamant to temptation. It is because that after your own enterprise becomes successful, other people will come to sell their projects, and if you invest in their "profitable and good" project, you will weaken yourself. Just like a tree, if it has many branches, it can't grow well. Especially for our Chinese enterprises, Chinese large enterprises, compared with the ones in the western countries, are just middle or even small scale ones. Under this kind of situation, you should concern on your own business line first and make it become the market leader then you can take brand extention and diversity into consideration.

 

    In sum, we consider the brand extention as a trap to our Chinese enterprise, it is full of many benefit temptation: it is profitable if you can extend it well while you can lose everything if can't. 
So we should be care of brand extention.