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Mergers & Branding Strategy

Mergers happen for what seem to be good business reasons – access to new markets and distribution networks, scale in consolidating industries, product diversification and new revenue streams, acquisition of strategic assets such as technology, etc.

Regardless of business intention, most mergers fail. And they do so for one reason: cultural differences and the subsequent failure to integrate.

Mergers Gone Bad: A Failure To Integrate

A stream of studies has shown that corporate mergers have even higher failure rates than the liaisons of Hollywood stars. One report by KPMG concluded that over half of them had destroyed shareholder value, and a further third had made no difference.

So why do mergers go so terribly wrong so often after such great promise? In many mergers, especially mergers of equals in which neither party wishes to be perceived as being acquired, a "we-they" mentality can quickly set in.

Rivalries develop. Integration becomes nothing more than political trades as employees cling to the old ways of doing things and the spiral down begins until one culture dominates or the whole thing falls apart.

Successful Mergers: Shared Visions

For any merger to succeed, the past has to be quickly replaced with a compelling new future, often a rebranding with a shared vision around which people can let go of the past and move forward together with confidence. Without a clear and compellingly communicated brand, even the best merger strategy can rarely inspire the kind of cultural fusion and action needed to produce major change.

In merger situations a brand works on several levels:

  • Market level: a new brand identity simply proclaims the new company’s presence
  • Corporate level: the brand serves as a tool to structure and simplify what can be a complex business as an understandable whole
  • Investor level: the corporate brand becomes a lens through which the strategic value of the merger is made tangible
  • Human level: the brand comes into its own by actively engaging employees to accept and support the entire merger process and understand what their own role will be going forward.

Brand Strategy: Capturing Hearts & Minds

A clearly communicated brand strategy helps buy-in of the strategy, builds momentum, generates confidence, sustains loyalty and, ultimately, creates value. A brand, however, must be made tangible if change is to be meaningful and enduring.

Without credible communication, and a lot of it, employees' hearts and minds are never captured. This is the point at which the corporate brand assumes a critical role in successful merger integration efforts.

Is your organization anticipating a merger? We can help you develop a successful branding strategy as well as employee brand engagement. Call us at (949) 273-6330 or contact us.

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