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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: Darcy Newell on Monday, May 20 2013 05:13 PM | Comments (0)
    Seamless

    Yahoo’s acquisition of Tumblr may be dominating Internet Week news, but close on its heels is the newly announced merger between Seamless and GrubHub—two food delivery companies that target the same audience with a seemingly indistinguishable value proposition.

    Two weeks ago, we evaluated the two brands and their ability to use creative expression to differentiate where they cannot through functionality alone in our post Subway Standoff: Using Brand Voice to Stand Out, One Train Car Ad at a Time.

    GrubHub

    GrubHub is the burly, unexpected, anything-for-a-laugh comedian. Seamless is the refined older sibling who knows everything about you, but refrains from judgment. It comes down to a matter of taste—literally (the restaurants you’re connected to) and figuratively (the brands’ personality and marketing style).

    Today, the companies announced their intent to merge, bringing together their technological capabilities, and broadening their restaurant access and domestic and international presence. The merger would also enable the two companies to trounce up-and-comers like Delivery.com and Eat24.

    From a business perspective, the decision makes perfect sense, and consumers who toggle between the two will rejoice in the new simplicity, and, ahem, seamlessness.

    GrubHub Ordering

    But it poses an interesting question—what will happen to these two, well-formed brands? Will they veer in one direction over another, try to bring them together (SeamlessHub, anyone?) or create a new brand entirely?

    In our last post, we argued that by tapping into the desires and trends of its target audience, Seamless has created a more compelling expression—one that may ultimately connect users to the brand beyond the moments they spend using the service.

    Seamless

    However, both brands are successful, and part of what makes them so is their commitment to a central idea, weaving it through their name, visual identity, and voice and messaging. If, in coming together, they try to be everything to all people, the new, consolidated brand might lose it’s way, failing to be something special to anyone.

    This is only just beginning to unfurl. We’ll be watching, observing, and sharing our thoughts, but we want to hear from you, too. What do you think should happen? Should one brand remain strong, or will a hybrid identity emerge?

    Comment below and tweet to us at @Interbrand with #Seamless #GrubHub #IWNY.

    Darcy Newell is a Consultant in Verbal Identity for Interbrand New York.

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  • Posted by: Greg Silverman on Thursday, January 21 2010 06:30 PM | Comments (0)

    The US $19 billion price tag attached to Kraft’s takeover of Cadbury has sparked both warnings from investors like Warren Buffett and accusations of an undervalued bid from Cadbury. How much Cadbury is worth isn’t really the question, but rather how much is it worth to Kraft?

    With the approval of its takeover offer yesterday, Kraft is paying for the significant opportunity to create incremental profits for its shareholders. In this deal, Kraft will have several operational levers it can use to drive improvements: staff cuts, distributions synergies, marketing leverage, and procurement efficiencies, to name but a few. These traditional approaches to profit enhancement are likely to breed many one time or short-term benefits. A well-run company like Kraft is likely to realize these benefits. Hence the US $19 billion price tag.

    However, it’s unlikely that the deal will dramatically create value at the product level. Brand value creation occurs when demand is generated in unique ways. Most of the Cadbury brands that come with the acquisition are well established with broad sub-brands. The Cadbury portfolio’s preeminence in the market suggests that Kraft believes that buying brands is a better bet than developing what’s currently in its pipeline, an indicator that its internal innovation may not deliver their growth objectives.

    If Kraft makes the common post-M&A mistake of putting innovation on hold to focus on creating marketing efficiencies, then it’s likely that the breakthrough, demand-generating ideas that will make the deal “pay” won’t emerge. So Kraft will need to make the deal work with efficiencies through combined operations, and effectiveness through brand portfolio management.

    This is a tough job—and in order for Kraft to pull it off, it is also imperative that it pays equal attention to its internal operations. While the face it presents externally is key here, engaged employees are also critical to any mergers' success. As a recent SHRM foundation survey focused on M&A employee-related issues pointed out, 63 percent of newly merged brands are unable to sustain financial performance, 62 percent see a loss in productivity, 56 percent experience incompatibility between cultures, and 53 percent lose key talent – the list goes on.

    Cadbury’s culture, in particular, may jibe with Kraft’s. While undoubtedly a large company with an extensive portfolio, Cadbury has a history of being a “family brand” and its employees are already up in arms about the acquisition. And as Kraft begins streamlining its portfolio, inevitable layoffs are likely to fuel more fire. Additionally, while Cadbury’s workplace is all about being open, honest, creating quality products, and acting with complete integrity, Kraft is guided by a more dynamic proposition, which promises a “fast-paced environment” founded on results-focused principles like innovation, decisiveness, and teamwork.

    If handled correctly, potential synergies between the two cultures could outweigh fallout or loss of trust. If handled improperly, we could see the brands face the same obstacles as Sprint/Nextel or AOL/ Time Warner. That's why Kraft will need to focus and align employees to immediate effect with a properly defined, well-managed, and communicated corporate brand.

    While the challenges that come with this deal are numerous—Warren Buffett's disapproval, notwithstanding—as with any merger, good strategy will ultimately dictate its long-term success.

     

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