What are the problems generally faced by the companies going for multibranding?

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The strategy of multibranding has both advantages and disadvantages. As the advantages suggest, multibranding by companies offer the consumer more choices from one central location where, let's say in the fastfood industry, where multibranding is actually going on in real time. Fast food operators expands their operation to include more...

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The strategy of multibranding has both advantages and disadvantages. As the advantages suggest, multibranding by companies offer the consumer more choices from one central location where, let's say in the fastfood industry, where multibranding is actually going on in real time. Fast food operators expands their operation to include more than just the fast-food count, but adds a diner with a menu where all kinds of foods can be ordered.

This is actually a strategy that McDonalds is using.

"The time appears to be now, as McDonald's began in 2003 to experiment with new concepts in existing restaurants. Eleven units in Indiana have added a diner, and one unit in Nebraska has a three-in-one concept with a McDonald's traditional menu, an upscale sandwich shop, and a separate treats area with baked goods and desserts." (21)

One problem that could occur is if sales don't increase dramatically, which is what is needed in order to operate a multibrand facility, and the results are flat, operating the multibrand facility becomes unsustainable financially because it does not provide an increase in sales revenue.

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