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  • Posted by: Alex Foss on Tuesday, September 3 2013 05:47 PM | Comments (0)
    Seamless.com

    The completion of the merger of Seamless and GrubHub was recently announced, and the combined organization will be known as GrubHub Seamless. Since the merger began, both food delivery companies expressed optimism for the benefits their combined technology and network of restaurants will bring. However, the new company will continue to operate as separate brands, despite its new name. It was very quick, but the new GrubHub Seamless president Jonathan Zabusky referred to the company in an interview as a portfolio of brands.

    Companies that enter into mergers and acquisitions often focus on the technical and financial aspects of the merger, while brand is considered after the fact. But the strategy that guides a union of brands can make or break a merger. Poorly advised or hasty integrations can destroy what made either brand valuable in the first place. Brand-driven decisions can help the new organization deliver lasting value.

    Several considerations may be underpinning GrubHub Seamless’ strategy to go forward as two brands:

    • A portfolio of brands can better serve distinct audiences and customer segments, such as residential diners and corporate accounts. Each brand also may have stronger affinity in certain geographic markets that might be compromised by merging the two. As Interbrand’s Darcy Newell wrote in her previous analysis of the merger, “If, in coming together, they try to be everything to all people, the new consolidated brand might lose its way, failing to be something special to anyone.” 
    • Keeping the brands separate can help the organization extend into new categories that a merged brand may not have permission to enter. While one brand may have solid associations with food, the other may be more of a vessel to extend to other services and categories. The way in which Seamless and GrubHub have expressed brand voice is an important determinant of that ability. 
    • Merging two cultures can be extremely difficult. Preserving the cultures of both companies can reduce friction and maintain amicable working environments for employees.

    These issues not withstanding, there are also compelling reasons to integrate the two brands in the future:

    • Only having to support one brand can lower overall marketing spend, as well as facilitate a clearer and more consistent message to the market. 
    • A company’s brand portfolio doesn’t have to reflect the company’s internal structure, but it does have implications for how customers interact with its offerings. GrubHub Seamless may be better able to deliver an integrated experience for their users and network of restaurants with one brand instead of two.
    • The combined brand could more effectively stave off competition, provided that the equity is transitioned and managed appropriately. The merger has already prompted competitive action with Yelp’s partnership with Eat24 and Delivery.com
    • Merging the brands and their names could signal unity to internal stakeholders and potential investors, as well as a shared vision and value set.

    The degree to which these considerations will apply to other merging companies will vary. But in all cases, the brand of the new company should have a strong strategic foundation that is rooted in the realities of the market. It will be interesting to watch how this company evolves.

    Alex Foss is an Associate Consultant, Brand Strategy at Interbrand San Francisco.


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  • Posted by: Kristen Selinger on Tuesday, February 19 2013 05:18 PM | Comments (0)
    BrandWizard

    Mergers are making headlines today with talk of US retailers and airlines coming together. News that OfficeMax and Office Depot are discussing a stock-for-stock deal between the two brands has shares up are up 25% and 16% respectively. Moody’s Investors Service says the merger between American Airlines and US Airways announced last week threatens the credit quality of US airports. The stakes are high for brands entering into mergers and can impact entire sectors. Digital Brand Management can help manage the merger process and manage its impact on a company’s most valuable asset – its brand.

    Brands contemplating or currently in the process of any merger, consolidation or other business combination are undoubtedly analyzing the impact of many elements including financial evaluations, tax considerations, operational processes, material contracts, real estate, technology, risk, organizational structure and change management. Most organizations do consider the effect a merger or similar transaction will have on its brand. It is vital that they also take a proactive approach to governing this change, communicating it internally and externally, and ensuring that the merging organizations capitalize on already developed assets.

    Kristen SelingerWhether following the transaction the brand will be a newly developed combination of the merging organizations or one organization will adopt the other’s identity, it is vital that this is communicated both within the organizations and externally in a thoughtful, efficient way. As the organizations team up to develop business together they will begin sharing marketing collateral and leveraging each other’s skills and expertise. However, this integration can be very difficult, costly and potentially detrimental to the brand if it is unclear what the identity is and where employees can go to learn about and execute the brand strategy.

    Providing a web based platform for marketers from both organizations that clearly articulates the new brand guidelines, strategy, identity, assets and templates that support it, prepares communications teams for the change. It enables brands to manage the process and reinforce the change both internally and in the external marketplace.

    The brand platform will become a one stop shopping experience for all things brand related. This will control and reduce costs, saving time spent recreating assets, clearly stating brand guidelines and expectations for implementing the new brand, training employees on the new brand strategy, policing the brand in the market and ensuring only brand approved collateral is utilized.

    Perhaps most importantly, a systemized portal will also demonstrate a commitment to the brand. Utilizing Digital Brand Management in managing merges will inspire the organization and partners to be participants in the development and governance of the new brand during the reorganization following the transaction when change must be managed carefully and effectively.

    Kristen Selinger is a Business Development Manager for BrandWizard.


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  • Posted by: Kurt Munger and Caren Williams on Monday, January 7 2013 05:29 PM | Comments (0)
    Zipcar

    Zipsters, the passionate and loyal customers of Cambridge-based Zipcar, may have collectively groaned as it was announced that a traditional car rental company will acquire the beloved car-share pioneer. Despite fears that their go-to for “wheels when they want them” could become lost in the rental car industry it set out to disrupt when Avis Budget Group acquires Zipcar for $500 million, the deal creates interesting possibilities for these two brands to leverage the best of what each can offer.

    The Zipcar counter-culture consumer base is loyal to its brand, but these fans are also passionate about the financial and environmental benefits Zipcar brings to society. This acquisition can be the means to bring the benefits of car-sharing to more people than ever before.

    Tech-savvy and open-minded Zipsters are just the community of consumers a company like Avis can tap into to elevate their brand in a changing market. The Zipcar community is open to sharing and consuming only what’s needed. The brand evokes perceptions of fun, ease and excitement.

    We Try Harder

    With Zipcar in their portfolio, Avis will have an opportunity to target new consumers with a product that works for their lifestyle. Zipcar can help shift Avis from a commodity category, with consumers focused on getting the lowest price or banking the most loyalty points, expanding the car-sharing market for everyone.


    The benefit of the deal for Zipcar, a progressive company with cool ideas, a loyal user following and a proven infrastructure, is the acquisition represents a way for them to expand their brand and the entire category of car-sharing into new markets. Since the car-sharing market is still relatively new and inexperienced, Zipcar appears to have reached a plateau of sorts in regards to getting new users.

    This is where the Avis brand can help grow the car-sharing category. It can help capture the “more traditional” audience, introducing them to car-sharing with its recognizable brand name, scale of fleet and locations.

    Both brands have some homework to do. As with most acquisitions, it’s not just a question of how to integrate the operations and the P&L, it’s about understanding how to remain authentic to your current consumers while evolving and becoming more relevant to new ones.

    2012 had its fair share of pairings – including Disney/LucasFilms, Delta/Virgin Atlantic and Starbucks/La Boulange – that surprised communities of brand loyalists. Yet each suggests areas of growth opportunities for all involved. As 2013 begins with the pairing of Avis Budget Group and Zipcar, the road ahead for both brands looks promising. Sometimes unlikely pairings can yield rich results, and we, like many others, will be eagerly watching their next move.

    Kurt Munger is Creative Director and Caren Williams is an Associate Director Brand Strategy at Interbrand San Francisco.


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  • Posted by: Hugh Tallents on Friday, October 5 2012 10:48 AM | Comments (0)

     T-mobile  

    Photo Credit: T-Mobile USA

     

    T-Mobile announced, Tuesday, the formalization of a deal to merge with Metro PCS. The deal is still subject to regulatory approval, but is unlikely to face too much objection. Ever since the FCC and DOJ combined to block AT&T’s merger with T-Mobile USA last year T-Mobile has been viewed a little bit of a lame duck in the industry, garnering little in the way of investment from its parent company Deutsche Telekom while hemorrhaging customers over the past year to the other 3 networks.

    Metro PCS conversely, with its expanding footprint and customer base in the no contract space (where most of the acquisition growth in the industry is), was viewed as a prime industry takeover target, albeit one whose network was starting to show signs of creaking under the strain of smartphone adoption. Sprint-Nextel, the previous frontrunner, saw its share price tumble on the news, especially since Sprint-Nextel’s and Metro’s networks were the most compatible. The marriage of the two looks set to create, on paper at least a viable 4th player in the market with around 42m customers.

    Metro PCS and T-Mobile USA announced that they will both continue to operate as customer facing brands under the T-Mobile parent name. Their propositions, on the face of it, look perfectly set up to position the new entity as the crossover brand in the industry – the lower end contract customer meets the higher expectation having no contract customer. This solves a problem for T-Mobile because they never really looked like they wanted to be in the no contract business anyway. The margins are smaller, revenue less predictable, their contract brand gets tarnished and the distribution footprint required is fundamentally different. They buried their no contract offer in all communications and it only really gained traction because their master brand became tarnished enough for people to decide between a contract or no contract from T-Mobile.

    Metro PCS conversely is very happy in the no contract space. It stacks them high and sells them cheap and has done very well with a particular affinity amongst a pragmatic group of cost conscious and predictability focused customers. T-Mobile, the parent may even be excited by the idea of having a place to send low value customers while Metro may possibly be encouraged to up sell some of their own customers into a T-Mobile contract.

    In short, you can see why they did it.

    So where’s the problem?

    The problem is the customer. Traditional wisdom was that people went no contract because they couldn’t get credit and thus couldn’t get a contract. Companies like AT&T and Verizon even started pre pay or no contract brands to catch the almost 40% of applicants who fell into that bracket. But this is changing.

    Now there is increasingly attrition from post paid to no contract driven not solely by economic hardship but by a desire to find a smarter and more predictable monthly payment without too much of a drop off in terms of quality.

    T-Mobile is either going to have to retain their no contract offer, which will be duplicative and expensive, or try and migrate their customers to the Metro solution. They can overcome a number of issues via intelligent integration of their distribution, but the attitudinal differences and perception of a quality drop off between T-Mobile and Metro may cause many of their pre pay or no contract customers to go elsewhere which may make the deal less impactful than they may think.

    Metro, also may not want some of the lower value customers that T-Mobile will try to send them and will try to usher them elsewhere – further exacerbating the frustration of a customer base still reeling from 2011’s failed merger. What T-Mobile may quickly find is that it is their disenfranchised contract customers that now walk into the waiting arms of Metro PCS. While that may be preferable to losing them to their post paid competitors, it is rarely a good idea to voluntarily lower the barriers to exit for customers when your company is failing.

    The differences between these two companies are at the same time paper-thin (the width of a contract) and cavernous when it comes to customer profile. If this is a merger predicated on cross selling and upselling, then I’m afraid they are likely way off base. If it is built on consolidating and creating stability for two companies headed in different directions, then it might just work. Regardless, the industry now has a 4th competitor and the FCC will likely see that as a good thing. Whether that 4th player is able to deliver effectively for their customer is another thing entirely.

    Hugh Tallents is a Senior Director of Strategy at Interbrand New York.

    To read our Best Global Brands 2012 analysis of the telecom sector and explore charts on the top 100 brands, please visit www.bestglobalbrands.com

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  • Posted by: Helen Gould on Monday, May 23 2011 12:59 PM | Comments (0)

    It’s easy to scoff at Microsoft’s acquisition of Skype as a woeful attempt to buy loyalty. A medieval marriage, if you will, intended to make the duke beloved through alliance with a pious wife. And it is true that, generally speaking, Skype users *love* Skype where as Microsoft users merely tolerate the brand, or, best case, adopt a love-to-hate-it attitude.

    It’s superficial assessment and misses the point.

    The point is, ownership of Skype gives Microsoft the opportunity to deeply alter its DNA and to fundamentally change the very nature of the Microsoft brand through an open, can-do, user-focused attitude. Imagine:

    • Seamless integration of Skype throughout Office. Easy accessibility to anyone and their data from virtually anywhere. We could launch a videoconference on the fly from within Word, or get instant feedback in the midst of making a PowerPoint deck.
    • In-your-face xBox sparring. Live video interaction leads to a fundamental reconsideration of what massive multiplayer online gaming really is. Graphics merged with live footage morphed into a game. More realistic avatars. Trashtalk taken to a new level. Sweet!
    • Widespread corporate adoption of Skype as telecommunications infrastructure. IT is already intimate with Microsoft. If Microsoft does it right, transitioning to Skype will be a no-brainer for many CIOs. Systems will be easier to manage and users will have an improved overall experience.

    Maybe Microsoft will be able to start living up to its 2006 tagline, “Your potential. Our passion.” Heads will turn. Opinions will change. Grudging Microsoft users may become enthusiasts. It’s not too much to expect, if you lengthen the timeline a bit – if Microsoft adopts the user-centric Skype approach and if Skype influences Microsoft more than Microsoft influences Skype. What started as another way to beat the system could help Microsoft, the system itself, truly blossom.

    Perhaps this is why Microsoft will succeed where eBay didn’t. Both companies bought Skype for its user base, functionality, and to play keep-away from Google. But while eBay saw Skype come and go with nary a scratch, Microsoft really needs this to work.

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