Brand positioning for growth during M&A

During mergers and acquisitions, there is brand work to be done, and while the logo, design, and name are crucial—a strong brand identity will be grounded in a new or improved brand positioning. Developing the right brand positioning involves a strategic reconsideration of existing assumptions, and a good deal of disruptive thinking. In the absence of strategic consideration, two newly merged brands could fail to capitalize on new opportunities, be misunderstood by the market, squander valuable resources, or create an identity in a vacuum. Evaluating the influence of the merging brands will help you develop this strategic position.

There are some key questions to ask: How can you set up your brand for future success? What are the most important elements that each brand brings to the table? What is your new, combined value proposition? How will deciding which elements to retain from each brand impact your projected revenue?

Such crucial business questions, more often than not, don’t come with immediate, obvious answers. Evaluating some examples of similar-sized companies coming together will help illustrate how a strategic brand positioning can determine the success of a merger or acquisition.

Developing a differentiated vision

If a merger or acquisition merely bolsters your portfolio to the level of your competitors, you need the right brand positioning to pull ahead of the pack.

Let’s look at a company from the vision category: A B2C producer of lenses acquired a surgical vision equipment manufacturer, with the intention of creating a unique eye care offering from early to late life stages, along the continuum of care. This concept, however, of full-lifecycle vision care was differentiating in itself—there were already two competitors in the marketplace with similar portfolios. The new positioning allowed the new entity to communicate a distinct vision, focused on proactive as opposed to reactive care. The company differentiated by breaking free from a marketplace standard.

Conveying co-created value

If an acquisition results in a breadth of complementary offerings, the right brand positioning should elevate your combined power to the marketplace and strengthen stakeholders’ understanding of the value the company brings.

In this next case, a large medical device and services company was acquired by the number two player in the space. The acquisition was intended to broaden the company’s offering, allowing it to better compete with the number one player, create a more entrenched global footprint, and enable service offerings that satisfy value-based healthcare demands. The success of the acquisition relied on a key insight: that the new landscape in healthcare is not just about offering great products, but about mutually assured success—i.e., solution systems that benefit all customers and elevate the totality of the company’s offering. This resulted in a strong, unified positioning that emphasized co-created value, supported by messaging and taglines that promote collaboration in order to advance medical outcomes.

Keeping the best of both

Building common ground for a positioning that borrows from the best of both brands will preserve the value and interest of stakeholders across the board.

Lastly, let’s examine the merger of two leaders in orthopedic medical devices, intended to better serve physicians, hospitals, and patients in a fast-growing category. The merger required the unification of distinctly different businesses across two brands while establishing a flexible framework for future growth, and rallying employees to embrace the new brand. A strategic positioning aligned the new entity with the complementary values of the merging brands, and served as a basis for a new identity that preserved the monetary value and brand strengths inherent in each. This positioning highlighted the core values of both organizations: life-changing care, passion, exceptional quality, and honed attention to specific practice areas.

Key considerations for positioning your brand

These three examples illustrate how important developing a position, before you launch the new brand, is to the success of the merger or acquisition. The considerations that will shape this new positioning include: business strategy, existing brand strengths of the pre-merger entities, marketplace dynamics, and competitive positioning. All apply to helping your brand stand strong—and stand out—when it arrives in the market.

#1: What’s the strategic intent of your merger or acquisition?

The business strategy behind the merger must be the foundation of the new brand’s positioning. A sound brand needs to be an expression of where the business intends to grow, and how it wants to be positioned, post-merger. The business strategy will help to inform where the economic value of the merger comes from, and will be a sanity check for any new positioning that is developed.

#2: How are you measuring and monitoring your brand’s strength and the strength of any acquired brand?

Brand strength, particularly in the case of a merger, must be given serious consideration. Brand A may have fewer financial assets than Brand B; however, it might have more significant measures of brand strength. In these cases, despite being the “less valuable” brand, Brand A could have a greater impact and influence on the post-merger positioning.

Take, for example, the case of a B2B manufacturer of medical devices used by surgeons, which pursued a merger with a consumer-facing medical devices brand that is well known and has high visibility. The former brand is twice the size of the latter, but its brand strength is comparatively low. Therefore, the brand benefits greatly from association with the smaller, more established brand.

#3: What insights and conventions are strategically relevant to the positioning of the new entity? In other words, what dynamics are ripe for disruption?

Marketplace dynamics also play a role when developing a positioning. A merger or acquisition is an opportunity to strategically reposition a brand, or create a new entity that can respond to recent trends. Consider the eyecare example that we started with, where the merger created the opportunity to stand out in a category that had been largely stagnant and safe in its messaging. The sector had been predominantly mired in steadfast adherence to the practice of reactive treatment by life stage. Yet, the emerging trend towards proactive care in the health industry at large created an opportunity in the vision category for a brand that would take a more involved approach to getting the right care, at the right time, to the patient. The resulting positioning allowed the new entity to peel back conventions and make a bigger impact in the category.

#4: How will your merger change the competitive landscape and provide an opportunity to communicate your unique value to the marketplace?

Related to marketplace dynamics, competitive analysis helps to inform what areas of opportunity exist for the brand in the market, when accounting for existing brands. This is particularly important to think about, as new competitors are brought into the fold, and an entity with broadened scope is now competing on new fronts. In this case, consider the earlier example of the number two medical device player that had ambitions to serve a broader global audience across more capability areas. The introduction of new audiences brought new competitors, but also the opportunity to galvanize the entire medical community behind its brand. Its new positioning put forth a message of its collaborative efforts to advance medicine, placing cooperation above competition.

The net result of these considerations is a differentiated brand positioning that communicates added value and provides the framework for developing a strategically sound identity. Differentiation is not so much a consideration as an imperative, and a litmus test for whether or not these four considerations have been explored sufficiently. A differentiated brand positioning will result in a brand and business that generates unique value in the marketplace and resonates with the target audience.

There’s a lot to consider here—and each decision will have a major impact on the new entity. But mergers and acquisitions, when executed strategically, create an exciting opportunity to develop a brand positioning that increases overall brand value and generates growth for your business.

Contributors

Senior Consultant, Strategy