With the recent economic slowdown, many companies are turning to a growth strategy that revolves around acquisitions. While there are a number of financial and strategic considerations around acquiring another company, there are also important brand considerations to keep in mind that can help companies make better acquisition decisions.
1. Know where you are and where you want be.
Ask yourself what, from a brand standpoint, is driving the acquisition. Is there a specific position in the marketplace that you don’t currently own but want to? Are you looking to shore up your current positioning? If you are seeking to buy your way into a market, are you targeting the proper point-of-entry? Knowing where you currently stand in the marketplace and where you want to be – and why – can help you make more informed decisions about what acquisition makes the most financial and brand sense.
2. Know your markets and players.
Once you know where you are and where you want to be, brand-wise, it’s time to strategize how to get there. It’s critical to have a good understanding of the needs – both met and unmet – of a market’s customers, and identify where your current positioning places you relative to those. If you are seeking to acquire a company to stake out new territory in the market, be sure that they are not positioned so differently from your brand that they cannot be integrated both operationally and perceptually into your enterprise.
3. Plan for Integration
As you are evaluating your acquisition targets, keep in mind how they would fit with your current brand, positioning and company culture. Consider how an acquisition would impact the perception of your company: would you be seen as the same type of firm, be perceived as moving incrementally in a new direction or would the acquisition completely change how customers and competitors view you?
Customer and distributor loyalty is also a critical consideration when planning how to integrate an acquisition, especially if the move results in an absorbsion or rebranding of the acquired company or your own enterprise.
4. Benchmark and Continue to Benchmark
Increased revenues are just one way to evaluate the relative success of an acquisition. Consider performing some research to benchmark and measure issues such as:
• Changes of customer perception of your company and the acquired one
• Distributor satisfaction with the new entity and/or offerings
• Employee engagement
• Management perceptions of company integration
It’s helpful to take measures of these types of things when the acquisition is announced, and then perform follow-up research at six, nine or twelve month intervals.
Keeping brand issues in mind when considering acquisitions provides an added layer of information that can result in more insightful company evaluations, better-informed decisions and
Mark Shevitz, Sr. Brand Manager
