Branding Pitfalls & Imperatives for Mergers & Acquisitions
By Sara Tang
The failure rate of mergers and acquisitions globally is high. One of the
chief reasons for failure often cited by companies who have undergone this
change is that financial and legal matters take precedence over the brand
and customer during the integration process. And when these two critical
areas of a business are neglected, it can make integration nearly
impossible or extremely costly to achieve in the long-term.
Derived from our collective experience working with companies, here are
some branding pitfalls that anyone about to undergo or presently undergoing
a merger or acquisition should consider and avoid:
Failure to make an objective assessment of relative brand strengths - The
Bank of America vs NationsBank in 1997 is taken as an example to examine
Emphasis on the Short Term, lacking Future Perspective - Norwich Union vs
Commercial Union General Accident in 2000 is taken as an example
Marrying the Incompatible - Daimler vs Chrysler/ IBM vs Lotus in the
Lured by the New, Casting Aside Existing Equity - PWC Consulting vs
So what should a company undergoing M&A do to avoid the pitfalls listed
above? Our best advice is to plan early, and evaluate often. Planned and
executed well, the prognosis for M&A need not be unnecessarily grim.
Rather, it could turn into a unique opportunity to establish a leadership
position in the market by setting out a new direction for the branded
entity, and clearly articulating the benefits for key constituents.
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Profile of the Writer
Sara Tang is Director of Strategy at The Brand Union
, a leading global
brand agency with offices in Hong Kong and Greater China. The Brand Union
has been at the helm of notable global M&A branding programmes for Credit
Suisse, Bank of America (following merger with Nations Bank), Bank of
America Merrill Lynch and Allianz Group.