The essential question to ask before extending your brand
Are we doing this because it's better?
Or because we can?
As organizations grow, they gain an audience, revenue, cash flow and trust. They add staff and then, soon, they decide it's time to offer something new. Smuckers decides perhaps it should use its shelf space to offer a peanut butter. A corporate coach wonders if he ought to add HR consulting services. A website decides to clone a product made by a smaller company that they can bring to a larger audience...
If you extend your reach because you can, because you have market power, you will probably be doing your existing customers a small service (centralized support or billing or just one less person to deal with) but your brand doesn't increase in stature. You had a chance to bring some of your original magic to the table (after all, it's that magic that got you started) but all you did was bully the competitors out of the way.
On the other hand, if you extend your brand because the new offering is better, magical in the way you can make it magical, then you've dramatically increased not just your market share but your perception as well.
Nike and Apple sometimes fit into the second category--the iPhone and some of Nike's clothing options are clearly different/better. Starbucks did it when they launched their ice cream.
On the other hand, there are literally thousands of organizations (including non-profits) that head down the path of mediocrity by rushing to offer 57 varieties, merely to please today's shareholders, merely because they can.