How to keep brand strength through M&A
5 min read
12 December 2016
With the recent news that Samsung is buying automotive electronics-maker Harman, one of the biggest questions has to be how it will keep brand strength – especially with it still reeling from the Galaxy Note 7 fiasco – during and after the acquisition.
Of course, it’s easy to see the synergies between the two companies, one being an automotive electronics-maker, the other making a big push into connected car technologies. Going through a merger or acquisition, leaders tend to focus on the quantifiable aspects of the transaction, such as financial models, tax implications and employment contracts. But a unified brand message that aligns with the new business strategy must be created for the future – so how will Samsung strove to keep brand strength?
Mergers and acquisitions present great opportunities for firms to rethink and refresh brands. But when businesses fail to prioritise or consider the brand it undermines and sometimes sabotages the success of any future growth. Here we cover some of the steps business leaders should consider when dealing with M&A to ensure they keep brand strength throughout the process.
Establishing who’s who
The manner in which a firm creates its new brand message after a merger provides insight into the how the separate cultures might serve one another and whether the two can build something greater than the sum of existing parts.
Adopting one brand over another might be the right decision where one is clearly dominant, as Rakuten did when it took over Play.com. However, while this is the most common visual identity solution, in practice it is most often managed quite bluntly, with the acquirer simply using the power of its own visual identity.
A fusion of two brands is less frequently used, but can be transformative by combining the best of both. EE, for instance, was responsible for Orange and T-Mobile high-street shops merging into one property, cutting operating costs whilst still maintaining city centre presence. Combined with a strong advertising campaign, EE’s revenues jumped ten per cent to almost £6.5bn.
We can safely then say a merger’s success relies in part on preserving positivity among customers and employees so if you want to keep brand strength it’s smart to pursue a strategy that explicitly seeks to transfer equity from both merging companies to the new one.
Measuring the new firm in order to keep brand strength
Mergers and acquisitions of brands usually mean the resulting business portfolio has to be evaluated and its strength is tested. While a brand cannot be judged on its website branding alone, visual indicators offer surprising insight.
Brand performance in the digital realm can be surmised by its aptitude in message, consistency and accessibility. For instance, colour is extremely important in consistency. The biggest brands in the world can be recognised by logo colour alone. The colours you use on your website can say a lot about what your brand stands for, create a sense of harmony and can make your brand more visually appealing and therefore more memorable. Equally using too many colours can make your brand message unclear. It’s thus crucial to have a sense of how your brand is performing immediately after M&A activity, to know where to invest time and where to leave the current design as is.
Creating brand guidelines
Once you have a strong brand to move forward with, the next challenge is being able to respond confidently to market changes and media opportunities. It’s harder than it looks to maintain consistency when you can’t risk breaking the new rules of the brand. This sort of dynamic movement can only be achieved with great planning, effective collaboration and streamlined processes.
A centralised asset platform enables agile and reactive marketing, as digital assets are easily accessible by the whole business and there are no concerns or questions over version control. When brands can create, find and use content within one tool, a streamlined approach across channels and international markets can be used. This ability to forward plan also protects the marketing department. With the digital assets in place that represent the brand, the firm can be confident that the approach is within brand guidelines and in line with business goals.
Chris Hall is CEO at Bynder