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Written by : Ben Kakani |
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Thanks for your comment Eloisa Gang, have a nice day.
- Ben Kakani, Staff Member
if we believe as we do that the goodwill of customers and employees is a large economic asset of a company then how you treat that asset during a merger is inherently of great interest our initial research focused on documenting the number of options available to companies when they merged in terms of a choice of a post merger brand we identified 10 separate strategies that could be regrouped into three broad categories the first is what you might call backing the stronger horse we choose one brand and we lose the other one the other set of strategies regroup under the heading of business as usual I take you over both brands survive so P&G takes over Gillette from a customer point of view nothing very much changed the third strategy which we called fusion branding is where you choose to take an element from the identity of both companies either the name and/or the symbol combine them to signify that the merger is growing on the strengths of both companies the second stage of our research involves testing whether there was evidence from the capital markets that any one of these strategies was inherently superior to the others existing research shows that merging companies typically underperform the market by an average of five to ten percent in the three years post merger our research replicated the common finding indeed our our companies underperformed the market in aggregate by seven percent over the three years post merger but this was a function of two very different forms of performance fusion branded mergers actually outperformed the market by a small margin of around five percent whereas business as usual and backing the stronger horse strategies underperform the market by close to twenty percent it was the net of the two that produced the minus seven percent the strategic implications of our research are that emerges where customer and employee goodwill are significant assets of the merging companies then that merger would do well to consider a fusion branding strategy you
Thanks Rolland your participation is very much appreciated
- Ben Kakani
About the author
I've studied meta-ethics at University of Richmond in Richmond and I am an expert in discrete geometry. I usually feel indescribable. My previous job was social and human service assistants I held this position for 28 years, I love talking about homing pigeons and football. Huge fan of Joe Lacob I practice wrestling and collect rocks.
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