Widen: digital asset management – the secret sauce for M&A
According to Statista, the United States represented the largest M&A market worldwide in 2018, with deals amounting to upwards of $1.6 trillion. Whether it’s T-Mobile buying Sprint Corporation, the Walt Disney Company joining forces with 21st Century Fox, or Dell and VMware becoming one entity, buying another company is no mean feat. It takes months, if not years, of manoeuvre. Blood, sweat and tears shed over brokering lucrative deals. Red tape to cut through, politics to navigate and negotiation skills flexed.
Naturally, most corporate mergers and acquisitions take place behind closed doors, after protracted discussions and secretive planning. But a signature on the dotted line doesn’t necessarily guarantee success. It’s what happens after the deal has been done, and the merge of multiple departments, product lines and cultures has been set into motion that governs the success of M&A activity.
Post-merger or acquisition, the role of the marketing team and the tech tools it has at its fingertips can significantly impact how smoothly and effectively the two companies come together. While this is, of course, one of many factors that impact the outcome of a successful merge, here we explore just how and why the effective use of marketing tools and the empowerment of marketing teams can play a positive role.
The Quaker Oats-Snapple snafu
In the mid-1990s, American food conglomerate Quaker Oats set its sights on a new venture – snapping up bottled drinks company Snapple. It was perhaps, on paper at least, a sensible move. Up until that point, the food company had successfully grown the Gatorade brand under its umbrella. Yet, after overpaying significant sums to acquire the company, it would relinquish ownership and sell Snapple to a holding company for much less than it had originally paid, just 27 months on.
One of the major mistakes that Quaker Oats had made in its acquisition was its strategy in running the company as one entity, with the Snapple product portfolio firmly under the Quaker Oats umbrella brand. and some rather half-baked advertising and marketing tactics that didn’t take into account brand sensitivities or customer preferences. In a drinks market dominated by the likes of PepsiCo and the Coca-Cola Company, unfortunately Quaker Oats .
But Quaker Oats isn’t the only offender when it comes to M&A faux-pas. If you look at any less successful mergers and acquisitions, you’ll see a common theme. Poor integration between departments, culture clashes and teams that simply don’t work together. The bigger the company, and the larger the product portfolio, the more these issues can be exacerbated without the right management team, tools and strategies in place to steer the ship.
If M&A activity was difficult before the COVID-19 pandemic, it’s certainly a lot trickier now amid global economic uncertainty and fragility. According to a , just over half (51%) of C-Level executives have put any M&A aspirations on ‘temporary pause’ in order to assess market recovery. While COVID-19 has slowed down the M&A ambitions of many
businesses, 2020 has already seen a surprising amount of activity in this area, despite the financial landscape, with many businesses stating their openness and intent to explore this avenue for growth. According to , between March and June of this year, the total value of M&A transactions in the US market totalled approximately $115 billion.
Mergers and acquisitions are a key stimulant for the global economy, and for individual sector development and evolution. But no one wants a repeat of the Quaker Oats-Snapple snafu. More than ever, M&A has to be carefully navigated, from the moment the deal is done, through to the once-separate parties coming together to form a force to be reckoned with. But there is luckily a way to avoid similar snafus for companies on the brink of realising their M&A ambitions.
As we explored in the Quaker Oats-Snapple example, sometimes the poorly managed sales and marketing efforts of the acquiring company can spell disaster for the success of the acquisition. So, arguably, the marketing team plays a more important role in breaking down cultural issues and department siloes, streamlining product lines and promoting a brand effectively to target audiences.
If we continue with the Quaker Oats-Snapple example, both companies had multiple product lines under their belts. When bringing numerous brands into a single corporate entity, things can get messy quite quickly without the right tools to keep track of brand information, logos, rebranding, imagery and so on. However, digital asset management (DAM) platforms can bring all of this information together so that the new marketing team knows exactly what to promote, and where, in appropriate geographies, and with the correct information and imagery.
Control during change
How does a DAM solution work? Essentially, it’s a central repository for all digital assets on product lines and brands. These digital assets – whether it’s brochures, videos, logos (old, transitional or new), product images, audio files and much more – are stored, organised and controlled from one place. Team members can search and share assets on demand, and repurpose them for use across multiple channels, including print, TV, web and mobile.
Essentially a DAM system empowers teams to safely distribute the new brand – through curated sets of assets and permissioned access – and provides control regarding how and when brand assets should be used. DAM ensures that brand guidelines are always adhered to, and asset performance can be analysed through a dashboard, revealing the files that are used the most frequently across departments and channels, and how customers engage with them.
What’s more, DAM tools can assist with creating clear, on-message communications on existing and new products/brands, which is particularly important in a period of change, when there might be some fear associated with how a merger/acquisition should be communicated internally and externally. Communication can be segmented by business group, location, department or geography to allow the right information to reach the right stakeholder, through governance and permissions. This approach saves everyone the time and pain associated with the potential risk of using the wrong information in the wrong way. Reducing crossed wires or mixed messages.
A lot of ingredients go into preparing and pulling off the perfect merger or acquisition. Many business leaders focus on the bigger picture elements – the financials, contracts, negotiations – but often overlook some of the smaller cogs in the bigger machine that are actually integral to the smooth running of an organisation. Let’s learn from M&A mishaps, and recognise the positive, make-or-break impact that technology platforms like DAM solutions can have in the modern business world. Or else run the risk of becoming the next history lesson for students at business school.
- Why ESG credentials should be central to your M&A strategySustainability
- Mergers & acquisitions are driving fintech innovationLeadership & Strategy
- McKinsey is looking to lead in sustainability space in 2022Sustainability
- Record valuations reached for M&A deals in 2021, says BainLeadership & Strategy