Competition with product rivalry is examined in a model where products
are differentiated by both quality and brand name. With no commitment
, firms produce a full product line. When firms can commit to restrict
their product offerings, firms specialize if the degree of brand-spec
ific differentiation is small, and they produce a full product line if
brand-specific differentiation is large relative to intra-firm differ
entiation. Firms may crowd a product space when all competitors would
be better off with specialization. Brand proliferation is a credible e
ntry-deterring strategy if the degree of brand-specific differentiatio
n is not too large.