It’s the nightmare scenario. Some readers have probably been through it already; picture it if you haven’t. You’re at the controls of a powerful brand. Everything seems to be in place: positioning, budget suppliers, distribution and a nicely developing sales curve. Then along comes a bigger company and gobbles you up. Suddenly all the certainties of yesterday are a mirage: everything you cared about so passionately (including yourself) may fall victim to corporate politics.
These days the barbarians at the gate are a tad more civilised: they even knock before entering. They have to, now that fragile brand values on the balance sheet are an everyday fact of business life. But while the acquiring company may act in good faith and do its level best to retain a successful management team, circumstances are not always in its control.
A good case in point is Orange which, through no fault of its highly successful brand team, has found itself at the centre of a corporate maelstrom. By serendipity, the Hans Snook-led company looks to have landed on its feet in becoming a subsidiary of France Telecom – whose mobile telecoms brands Itineris and Ola may well be subsumed in the Orange name. By serendipity? Well, not entirely. The cute deal cut by Snook has a lot to do with the powerful brand leverage at his elbow: much more powerful than that of Orange’s French equivalents.
Slightly more unpredictable is the future of Land Rover as a Ford subsidiary. True, Ford has developed a reputation as a caring steward of premium branded cars: take Jaguar as an example. But it knows it will have to tweak the brand if it is to make Land Rover a paying global proposition. And herein lies the danger. Too much tweaking, to satisfy the street-cruising crowd on Sunset Boulevard, and it will lose its essentially rugged character. On the other hand, Ford seems prepared to commit a level of investment which (aside from the new Range Rover) was lacking during its period of BMW tutelage.
Still less certain is the future of the galaxy of brands that was United Biscuits, since its takeover by the Finalrealm consortium. This was essentially a mechanical break-up designed to please exasperated UB shareholders. The rapid departure of UB chief executive Leslie Van de Walle post-merger is not exactly a ringing endorsement for the McVitie’s team. But then McVitie’s does not have the new economy leverage of a brand like Orange.
New economy sector or not, the consequences of a bungled takeover can be little short of disastrous, even for successful target brands. As the recent Commerzbank-inspired fiasco at retail fund manager Jupiter is demonstrating. Unilever should handle its newly-acquired Bestfoods brands with extreme care.