Rebranding is the updating of a company’s brand. But since a brand is not just a logo or brand name, rebranding is not just a change in signage or corporate colors, but a comprehensive change at all levels of a company’s verbal and visual identity.
Rebranding is an in-depth change in the brand concept at all its levels, involving a change in the brand name. Transformation concerns the mission, goals, and concept of the company, as well as all visual constants. Such a procedure is usually resorted to only if it is impossible to do without it. Changing the name of the brand and other components involves the development of substantial marketing research, as well as accurate financial calculations, which will lead to the market launch of an essentially previously unknown project.
Every brand strives to feel confident in the market, to find a positive response from consumers, and to be relevant and attractive. These aspirations are directly linked to a company’s marketing and business goals: without a properly functioning brand, it will lose profits, lose out to competitors, and earn less than it could. And in the course of development, sometimes there is a need for rebranding. There can be several reasons for this, but one of the main ones is Structural changes in the company, such as takeover, merger, or division. It is about rebranding as a result of mergers and acquisitions that we will talk about in this article.
Rebranding can vary depending on the scope of the change and the goals the company is pursuing.
When two or more companies merge, they may rebrand to create a unified identity and eliminate possible overlapping brands.
When a company undergoes a global structural transformation, management often concludes that it is essentially necessary to develop a new brand. The changes may concern the name, corporate identity, strategy, and other components.
Companies can merge, divide, and restructure. Such changes should be accompanied by rebranding because the use of past visual and semantic elements will be irrelevant to the new brand architecture, its specificity, and positioning. During rebranding, a company can change its brand platform, corporate identity, or even its name.
There is a lot of room for development, because there are several possible variants of events, or, to put it simply, different rebranding strategies. Based on the brand analysis, the elements that need to be adjusted are identified. A new strategy and brand positioning are defined – as “repositioning”.
Depending on the specifics of the business, rebranding in mergers and acquisitions can be completely new or it can be developed while maintaining continuity:
Adopting one brand at the expense of another can be the right decision when one brand is dominating the market.
A great example of emphasizing the stronger brand is the logo created after the merger of Dell and EMC. Here, the recognizable blue Dell lettering with a slanted “E” takes all the attention, while “EMC” modestly complements it. Pfizer did the same, merging with Warner-Lambert.
By the way, according to Anspach Grossman Design Agency, takeover companies keep their name about 85 percent of the time
Merging two corporate identities is used less frequently, but it is the most effective choice that helps to combine the best of both. A prime example is the merger of United and Continental Airlines into United. The designers managed to create a perfect tandem of strong elements of both logos.
Such a brand strategy is suitable if the merging companies have similar key parameters, such as market position and market reach. The rebranding after the Daimler–Chrysler and AOL-Time Warner merger is also an example.
The most interesting and time-consuming rebranding strategy in mergers and acquisitions is, of course, the creation of an entirely new brand. This is how American Steel changed its name and became USX. The name change may be due to a mismatch with the new components, scope, or brand strategy after the merger.
According to statistics, about 70% of M&A transactions do not bring the desired results, i.e. the purpose for which the transaction is made remains unachieved in most cases. One of the possible reasons for such low efficiency is that corporate branding is most often not included in the series of tasks addressed by top management before and during M&A transactions.
Branding strategy in M&A should be based on the idea that a brand is more than just a name and logo. In this context, the brand acts as a complex multi-component system, the loss of one of its elements may lead to unfavorable consequences for the transaction itself.
The brand can play a role in all stages of the transaction. In the preparatory phase, it is necessary to assess how the brands fit together and develop brand integration scenarios. In the transactional phase, the business must develop a shared vision and orientation of the brand concept for the future. In the merger phase, the brand already becomes in a sense an anchor.