Mr. Basu’s focus on the internal versus external benefits involved with mergers and acquisitions offers and interesting insight into what sometimes goes right and often goes wrong when two organizations become one and, more importantly, offers an approach for maximizing the overall effectiveness of the union.
As Basu notes in his article, and we have discussed over the semester, the external effectiveness of company and brand mergers can be difficult to measure. Measurement is often made more difficult as no clear predetermined objectives or targets are defined prior to an acquisition. Internal synergies are often anticipated via intellectual and brand leveraging, resource pooling, and the merging of complementary company cultures. However, these benefits are often mitigated by the lack of external direction. This last of plan creates consternation among competing brand managers within the same organization resulting in lowered employee morale and a reduction in long-term marketplace competitiveness which ultimately impacts the customer in a negatively.
The best way to avoid this scenario is to have a clear brand strategy, both internal and external, prior to completing a brand merging acquisition. Mr. Basu identifies the four main aspects of the branding strategy as corporate branding, product branding, brand identity, and brand architecture. Accordingly, using this top-down strategy for defining a business will send a clear message to, not only management and employee base, but also the marketplace, what the company and brand direction is eliminating any confusion hopefully resulting in fewer internal struggles while promoting external success.
Although Basu’s concept seems intuitive, it is easier said than done. While some companies have a clear corporate brand strategy, such as Rolls Royse being luxury, others, such as Hewlett Packard, are a bit more ambiguous. Hewlett Packard for example, and other companies like them, had a corporate...
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