Brand Architects specialise in meeting the needs of quickly mobilising the advisory skills required to plan and implement brand and and Merger and acquisition plans are huge risk – with many of them making great failure headlines in the business press.
A.T. Kearney, PricewaterhouseCoopers, McKinsey, and many other leading organisations and publications have produced conclusive research – there is a startling high failure rate for newly-acquired or merged businesses. Within 18 months of closing, 80% of large cap, 50% of small cap, and 80% of micro cap transactions fail to meet stakeholder objectives. Many reasons are cited for M&A failure, including culture clashes, integration challenges, and changing market conditions.
Brand Architects offer a risk mitigation and value creation service to support planned mergers or acquisitions.
Why use branding as part of the due diligence and subsequent integration process in M&A?
At very low cost, good organisational branding can mitigate risk by:
- Having a clearly articulated Vision of the businesses’ future strategy against which all senior managers can orientate their merger or acquisition strategy
- The branding process helps articulate why your M&A strategy will lead to success and gets buy-in from stakeholders
- Identity and remove unnecessary customer engagement friction costs when two or more brands are forced to coexist unnaturally
- Avoid poor cultural fit. Cultural can be measured and managed successfully and is both one of recognised failure risks in M&A as well as one of the unsung competitive advantages!
- Good brand transition strategy can ease the path of change for both customers and staff, reducing the risk of losing either
- Identify which brands should be grouped together in a monolithic structure and which should be maintained as individual or simply endorsed brands in a total portfolio
- Identify and communicate the strength of the new combined ventures to key audiences
- Transition your combined culture to align with your business strategy
- Drive ambition and singular purpose across sites and across territories
Branding can add value during M&A via:
- Good brand alignment within an organisation can act as both the catalyst and motivator to swing processes and infrastructure in line with the new business strategy facing forward toward tomorrow’s customers
- The correct brand portfolio architecture can enhance customers’ understanding and appreciation of the newly merged businesses & deliver enhanced incremental value
- Analysis of how service or product brands can tangibly define & deliver market potential
- Use portfolio analysis to define the role of the brand assets under your control in delivering your long term strategy
- Use the power of the combined organisation’s brands as a rallying point for leadership and staff increasing the speed and effectiveness of integration
- Build new brand equity with greater customer loyalty and increased revenue flows
The best M&A implementations use branding:
- To drive new direction from the top, without exception
- Early in the due diligence process to identify and empirically measure both product brand synergies and cultural (organisational brand) synergies. This gap analysis can both red flag possible hidden future problems as well as give useful information to the leadership team on the team they are already working with
- As a process driver to fully align the business with the business objectives and strategy while keeping the customer at the centre of our attentions (see fig 1 Brand Alignment Model)
- As a deep investigatory and management tool to understand the organisational brands which are underpinning the organisations
- To mitigate risk
- To add value