With Frontier and Spirit Airlines making headlines the past few days upon their merger announcement (Frontier and Spirit Airlines to Merge; Why this Deal Makes Sense) particular questions have emerged concerning the future brand…
- “What’s to come for the Big Front Seat?”
2. “Will ticket prices increase?”
3. “What brand name will they fly under?”
While the two companies have yet to confirm the name of the upcoming brand itself, the flood of theories presents just how important rebranding is in a merger/acquisition.
The M&A process -when done right – can be a great opportunity for two companies to strengthen their image and the scope of services. However, several critical components stand to challenge the process along the way.
With decades of experience playing key roles in many successful M&A activities, our MCDA CCG consultants concentrate on the power of branding below and identify the main principles that will help you avoid the most common mistakes.
Keep reading to learn more….
Merger Vs. Acquisition
Just to be clear, mergers and acquisitions are two different processes.
Mergers occur when two similar sized companies decide to join forces and create one more comprehensive and effective company. Acquisitions occur when one large company purchases a smaller one-usually a startup. The goal is to broaden the offer of the purchasing party.
Companies involved in either process will experience dramatic changes, and it’s imperative that you are prepared to handle this shift, especially from a branding standpoint. Let’s see how it affects both brands.
M&A Effect on Both Companies
Typically, the goal in a M&A process is to create a more powerful market player that benefits all sides. For one, customers will gain access to a more comprehensive offer -rather than wandering from one company to the other. Additionally, thanks to the foundation and resources of the larger company, the smaller company can step up its game. Finally, the purchasing party broadens the scope of their offer.
Usually, it’s the purchased company that completely integrates with the one that bought it. In some cases, the company maintains its original logo, but other materials become unified.
- Online Store(s)
- Legal Texts
With all of this, it’s not difficult to see why the M&A process is challenging and complex, and why success heavily relies on the strengths and abilities of the outside experts involved. We’ll talk about that a bit more below. First, let’s discuss some of the most pressing challenges that need to be addressed during the M&A process.
Let’s be honest, not every merger and acquisition is successful.
The fact is, not every merger/acquisition is a big success. There have been situations when joining both brands resulted in the drop of their original values. One of the more recent and high-profile cases is Amazon’s acquisition of Whole Foods back in 2017.
When Amazon announced their $137 billion acquisition of Whole Foods, the objective was to reverse Whole Foods decline in sales, lower its prices and secure more market share while helping Amazon move into the physical world of selling by bolstering its current offering.
Fast forward one year later, and the relationship turned sour, where Whole Foods employees were reportedly crying on the job and accusing Amazon of trying to turn them into “robots”. While escalating conflict between the two companies played out across the news, it became evident how powerful the act of branding really is.
If brand values and identities don’t align with long-term business objectives, a deal is set up for inevitable failure.
How to Avoid Common M&A Mistakes
Here, we’d like to mention three crucial reasons.
The first one is a lack or complete absence of strategy. M&A is a complex, long-term process, and it’s critical that you start with thorough research and a comprehensive plan to make it work. A large chunk of this strategy should be devoted to rebranding.
Secondly, it’s lack of professional help (or the wrong help). Working with a third party that can utilize an objective look at the entire process enables you to avoid the mistakes in most failed M&A processes. Working with an experienced branding agency will help you analyze the process from many angles. As a result, the chances of failure are lowered.
And the final reason is a lack of priorities. Remember, you can’t do everything at once. You must prioritize various tasks and assignments that need to be done and put them on a transparent and well-thought-out timeline.
While we hope this provides a bit more clarity into M&A and the make-or-break power of rebranding, we’ve barely scratched the surface – as its a complex subject that can’t be fit into one article.
However, if there is an M&A process in your near future, start it off on the right foot and reach out for help. Our MCDA CCG M&A consultants will educate you on what you need to know, perform any due diligence based on our wide-range industry expertise, help you with branding, integration of HR policies & procedures, internal communication, and so much more.
If you’re just not sure what you need or where the direction to go, we understand the overwhelm you may be experiencing. In this case, don’t hesitate to reach out and call one of our advisors at our office headquarters in Placentia, Orange County California (you can find our contact info here: Get in touch) We will gladly answer any of your M&A questions at no obligation to you!
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