2. The challenge Company B Company A Existing vision, existing culture, existing perception, existing products: BRAND B Existing vision, existing culture, existing perception, existing products: BRAND A New Entity NEW BRAND?! Own creation Intangible assets (as brands) represent 80% of the value of S&P’s 500! But, discussions about brand are almost not existent in due diligence talks!
3. Branding strategies: A FRAMEWORK Lead Company Identity Elements S1: Acquirer Company Brand S5: Joint Brand S3: Acquirer Company Brand S10: Flexible Brand Name retained Symbol retained S4: Acquirer Company Brand S8: Joint Brand S6:Joint Brand S7:Joint Brand Name retained Symbol changed Name changed Symbol retained S9: New brand S2:Joint Brand Name changed Symbol changed Name retained Symbol retained Name changed Symbol changed Name changed Symbol retained Name retained Symbol changed Etterson & Knowles (2006) Target Company Identity Elements
4. 4 groups of branding strategies What does it communicate? Acquirer Brand Strategy (40%) This deal is a merger and we are adopting the stronger brand Joint Brand (24%) This deal is a merger and we are adopting the best of boths brands Flexible Brand (28%) This deal is a portfolio transaction and no brands change New Brand (8%) This deal is a transformational merger and we create a new brand
5. Branding strategies: Acquirer Company Brand Employees Target firm employees gain visibility in a larger organization: new possibilities of careers Winner and Loser perception; Target employees have to adjust to new culture Employees of both firms could be demotivated
6. Branding strategies: Acquirer Company Brand Customers No ambiguity Customers of target firm may enjoy to deal with a bigger company Less control for customers Perception of being forced to chose Customers could be skeptical and damage the brand
7. Branding strategies Each M&A Branding strategy is different but, successful Branding Strategies share some common elements!
8. Key success factors Creation of communication strategy before and after M&A Raise awareness Involvement of all stakeholders Prove that the brand is trustworthy
9. references Hogan, S., Glynn, S. & James Bell (2005): Bringing Brand Into M&A Discussions, Mercer Management Journal Etterson, Richard and Jonathan Knowles (2006): Merging the Brand and Branding the Merger, MIT Sloan Management Review Martin Roll:Branding and M&A http://www.venturerepublic.com/resources/branding_and_m_a_marketing_strategy_brand_leadership.asp Marjo Johne: Brand Building after the Merge http://www.entrepreneur.com/tradejournals/article/100734042_2.html
