A proven roadmap for brand building through M&A activity

February 13, 2023

For contemporary brands, building a sustainable competitive advantage cannot come simply from messaging, taglines, logo design or marketing campaigns. The purpose of building a strong brand strategy is to allow your organisation to differentiate itself from rivals, to stand out from your competitors, to influence your customer’s purchase decision and to allow them to feel disinterested in alternatives. But in this increasingly competitive landscape, not all brands have the capability to become what they desire on their own.

This is why organisations, especially in the B2B and financial services landscape, are increasingly looking to grow inorganically through mergers and acquisitions (M&A). Rather than developing these newer or different capabilities internally, the right partnership can provide a tangible addition to a brand’s products and/or services, allowing an organisation to reach a position that makes them more desirable. But there are worrying indicators that brand issues are not being properly built into their due diligence processes.

At BrandMatters, we’ve successfully executed brand strategy initiatives for a variety of clients undergoing periods of change and flux in response to M&A initiatives. In our experience, leaders who see the full potential of brand, well beyond name and logo, gain a significant leg up in uniting companies and cultures with the values it presents to the outside world. Get in touch with the team to discuss your unique branding and M&A situation.

Brand is the most powerful, but sometimes the most overlooked, tool for solving many of the common problems in a merger

In M&A activity, business leaders frequently view brand management during a merger or acquisition as something simply for marketing and communications teams to sort out after the deal is completed. In our experience, integrating brand early and often can provide a clear and concise roadmap that helps guide strategic decision making, across the entire business.

Effective brands help organisations market and sell their services and products, but that is not all they do. Corporate brands drive real value, especially in the M&A process. Whether it is driving monetary valuation, negotiating position, providing insights that support alignment, unifying culture or streamlining integration, brands play an integral role in mergers and acquisitions (Forbes).

Whether your organisation believes it is ready to enter the M&A game soon or not, the stakes appear too high to wait. Regardless of which side of a transaction you may find yourself on, it is critical to get your brand in order and understand that a well-executed brand strategy adds value beyond monetary value, helping to unify your merged/acquired companies. Your brand has a powerful role to play and must be actively considered before, during and after the M&A activity.

The different types of brand activity considerations within M&A initiatives

There are three distinct points where brand should be considered throughout M&A initiatives: During the pre-deal phase, during the brand transition phase, and during the post-deal phase.

When brand is actively considered throughout these phases, your organisation will be in a position to determine the optimal brand strategy and architecture for your refreshed entity.

Pre-deal phase

In the pre-deal phase, senior and strategic leaders from both parties come together to determine the brand strategy and architecture for the merged entity. Whether you are buying, selling or merging, in this pre-deal phase it is important to understand that the existing brands typically own a relevant, genuine and impactful position in the market.

That value must be considered because the inherent goodwill will likely provide a benchmark to quantify the deal against. It is important to give your brand some objective scrutiny through research and evidence. Could your brand be outdated and stale? Is it telling the story of your company well, or is it still the best-kept secret? If this is the case, your organisation would benefit from an initial discussion with BrandMatters, where we can help craft an authentic brand that will help maximise value in the pre-deal phase and lead to long-term success for your renewed entity.

Brand transition phase

The brand transition phase differs because it requires more functional thinking about how the refreshed brand will manage things such as inventory, budgets, and communications. In this phase, it is important to ensure your brand is clear, concise, and consistent, so that all stakeholders have an understanding about how the business and its brands will be managed going forward.

In this phase, strong brands provide an internal indication for both companies on each side of the table, as well as insights into company culture and personality. A well-articulated brand will clearly communicate the value proposition of the company, which makes it easier for stakeholders to see the strengths, areas for improvement and areas where the companies compliment/overlap with each other. This is powerful ammunition that can help inform negotiations as you navigate beyond the brand transition phase in the M&A process.

Post-deal phase

Once the transaction is completed, that initial euphoria usually gives way to the laborious process of integration. In the post-deal phase, a number of activities need to be carefully coordinated to help ensure the brand is successfully implemented and rolled out in the market. This again requires more functional thinking as your organisation begins to redesign and implement different corporate and brand structures.

Effective branding in this phase helps to unify your renewed organisation by aligning your leaders and holding them accountable to the stewardship of the brand structures that they have decided upon. In this context, brand should operate as the North Star, a focal point that helps guide cultural differences, close gaps in shared knowledge, and set the agenda for successful and sustainable integration.

The final consideration for brand in this phase is in the ongoing measurement of success. Continual evaluation and monitoring through brand measurement can provide evidence about whether the M&A initiative was a success or not. This type of brand research also gives businesses an indication of how they can improve in further M&A activity down the track.

Brand decisions, made early and often, are critical to M&A success

In mergers and acquisitions, business leaders are often confronted with countless decisions and strategic challenges. With so many moving parts, initiating and integrating organisations together can seem like assembling a complex puzzle with thousands of unique pieces.

By placing brand strategy at the centre of the strategic decision-making process, organisations will have greater success in bringing their businesses together, creating meaning and enduring impact for the refreshed entity.

Bringing in an independent perspective to assess the current position and make a recommendation on future strategy from a brand perspective can make or break the success of the post-M&A organisation.

Whether you are mid-M&A or at the beginning of the process, BrandMatters can help you uncover and articulate the right brand strategy and brand architecture to lead your organisation to success. Explore our case studies to see how we’ve helped other organisations or get in touch to discuss your unique situation and stayed tuned as we will be releasing a comprehensive eBook exploring the Principles for M&A Branding Success.

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