Branding the merge

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Branding the merge

  1. 1. Branding the merge<br />Alistair Toffoli<br />Aalborg universitet<br />Group 1<br />
  2. 2. The challenge<br />Company B<br />Company A<br />Existing vision, existing culture, existing perception, existing products: BRAND B<br />Existing vision, existing culture, existing perception, existing products: BRAND A<br />New Entity<br />NEW BRAND?!<br />Own creation<br />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!<br />
  3. 3. Branding strategies: A FRAMEWORK<br />Lead Company Identity Elements<br />S1: Acquirer Company Brand<br />S5:<br />Joint Brand<br />S3: Acquirer Company Brand<br />S10: Flexible Brand<br />Name retained<br />Symbol retained<br />S4: Acquirer Company Brand<br />S8: Joint Brand<br />S6:Joint Brand<br />S7:Joint Brand<br />Name retained<br />Symbol changed<br />Name changed<br />Symbol retained<br />S9: New brand<br />S2:Joint Brand<br />Name changed<br />Symbol changed<br />Name retained<br />Symbol retained<br />Name changed<br />Symbol changed<br />Name changed<br />Symbol retained<br />Name retained<br />Symbol changed<br />Etterson & Knowles (2006)<br />Target Company Identity Elements<br />
  4. 4. 4 groups of branding strategies<br />What does it communicate?<br />Acquirer Brand Strategy (40%)<br />This deal is a merger and we are adopting the stronger brand<br />Joint Brand (24%)<br />This deal is a merger and we are adopting the best of boths brands<br />Flexible Brand (28%)<br />This deal is a portfolio transaction and no brands change<br />New Brand (8%)<br />This deal is a transformational merger and we create a new brand<br />
  5. 5. Branding strategies: Acquirer Company Brand<br />Employees<br />Target firm employees gain visibility in a larger organization: new possibilities of careers<br />Winner and Loser perception;<br />Target employees have to adjust to new culture<br />Employees of both firms could be demotivated<br />
  6. 6. Branding strategies: Acquirer Company Brand<br />Customers<br />No ambiguity<br />Customers of target firm may enjoy to deal with a bigger company<br />Less control for customers<br />Perception of being forced to chose<br />Customers could be skeptical and damage the brand<br />
  7. 7. Branding strategies<br />Each M&A Branding strategy is different but, successful Branding Strategies share some common elements!<br />
  8. 8. Key success factors<br />Creation of communication strategy before and after M&A<br />Raise awareness<br />Involvement of all stakeholders<br />Prove that the brand is trustworthy<br />
  9. 9. references<br />Hogan, S., Glynn, S. & James Bell (2005): Bringing Brand Into M&A Discussions, Mercer Management Journal<br />Etterson, Richard and Jonathan Knowles (2006): Merging the Brand and Branding the Merger, MIT Sloan Management Review<br />Martin Roll:Branding and M&A http://www.venturerepublic.com/resources/branding_and_m_a_marketing_strategy_brand_leadership.asp<br />Marjo Johne: Brand Building after the Merge<br />http://www.entrepreneur.com/tradejournals/article/100734042_2.html<br />

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