Imagine: you acquire a company. Do you bring it under your own company or brand name? Or do you let it keep its own name? These 4 factors influence brand architecture in business acquisitions.
From an economic standpoint, you might think: ‘Everything under one flag.’ But we say: ‘Wait a second, there are more factors to consider regarding brand architecture.’ Choosing isn’t simple, and every choice has its pros and cons. These four questions will guide you toward the most optimal choice:
If so, you can decide to keep everything separate or partially split. Well-known examples of this are Unilever or Procter & Gamble: umbrella corporate names with multiple brands underneath, targeting different market segments.
If that’s not the case, it can be interesting to maintain your separate branding and positioning. When Mercedes-Benz wanted to launch compact city cars, they consciously did so under a different brand name: Smart. The target audiences of both brands are simply too far apart. And naturally, Mercedes wanted to uphold its image as a luxury car brand.
An example closer to home: our own video department grew rapidly, leading us to decide to house our dear colleagues in a sister company. Our focus is on substantial family businesses and SMEs. Limelight, on the other hand, also targets other communication and event agencies.
What if your company excels in efficiency and speed, while the company you’re acquiring is known for its custom work and quality? Or what if you have the same offering, but the company you’re acquiring is the market leader in a specific segment and you are in another? Such things are sometimes difficult to reconcile, and fortunately, they don’t have to be.
One of our clients, P&V Panels, acquired fellow competitor EBB. A perfect match on both an internal and external level. However, EBB is known as a specialist, an established name in a specific segment. So together we decided to keep the name for the time being. EBB did get a new look that visually aligns with P&V Panels. This way, we combine the power of a strong group with the positioning of two specialists.
What if your company has a very flat structure and the other company is organized hierarchically? Internal values and corporate culture are the key to a smooth integration of the acquired company, yet many still overlook this.
Pay sufficient attention to this and look at what benefits your employees. It is important that they are on board and feel good in the workplace.
Every choice has its pros and cons. As with so many things in life, this isn’t a black-and-white story. Our tips: weigh the pros and cons. Bring in an external party with the necessary expertise and an objective perspective. Make the right choice as rationally as possible and ‘stick to the plan’.