The Funny Thing About Mergers
We've seen a couple very high profile, large scale mergers get announced in the last week or so.American Airlines and USAir. Office Max and Office Depot.
Now generally, mergers make a lot of sense. Two companies, two brands if you will, come together to form something bigger and better than they were when apart. They combine assets and complimentary skills to create a new total that is greater than the sum of their parts. The synergy between the two brands make for a greater impact in the marketplace. Two strong brands come together to make an even stronger one. You probably get the point!
The funny thing about the mergers announced this week is that this impact is not readily apparent ... certainly not on the surface.
Now admittedly, I am sure that there are synergies to be had financially and operationally - or maybe even in market coverage and purchasing leverage. I am sure there's a reason why the mergers make sense, if not only to protect their shareholder assets in tough categories within a tough economy.
But from a consumer and brand perspective, the benefit is not readily apparent. That's the funny thing about mergers sometimes, they can have nothing to do with consumer branding and I believe that's a lost opportunity. The brands together should make for a better consumer proposition, a better consumer experience. It will be interesting to see if that's the case over time for these two mergers. In the meantime, best of luck to them both.
What's your experience? Jim.
Jim Joseph
President, Cohn & Wolfe NA
Author, The Experience Effect series
Marketing Professor, NYU
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