Clarkston Consulting
Skip to content

M&A Trends: Integrated Brand Portfolio Roadmap

As detailed in our last blog, M&A Trends: The New Normal, while mergers and acquisitions may offer a quick way to grow your organization and potentially create instant wins, pursuing these strategies invites a multitude of new challenges for the CMO and marketing leadership.  For example, managing a post-merger stable of brands, where some brands may be complementary but others redundant, is tough.  Compound this challenge with simultaneously integrating two often disparate marketing organizations and cultures, and the task becomes daunting. As organizations and brands are merged, acquired, or even divested, the business, and marketing leadership in particular, must have a clear roadmap to increase the odds of long-term sustainable success.

So, where to begin? Imagine a scenario where the FTC has just approved your company’s proposed merger with a former competitor and bitter rival, and you have been selected by the CEO to lead the newly combined company’s Consumer and Trade Marketing team. With the primary impetus for the merger on the allure of cost savings through consolidation and operational efficiency, you are under considerable pressure. You must maximize the potential of the company’s intangible assets and its brands in an environment beset by rapidly changing consumer preferences and behavior, competitor offerings and sales channel disruption. Luckily, your newly inherited and bloated brand portfolio seemingly offers ample opportunity for intervention.

Putting aside the organizational changes required to make your vision a reality, your first move should be to conceive an Integrated Brand Portfolio Roadmap.  This Roadmap will inform all manner of strategic brand decisions including optimal number of brands to offer, portfolio roles and responsibility for individual brands, brand scope, type/level of investment, and innovation plan. When designing your Integrated Brand Portfolio Roadmap, carefully choose your brand criteria from among a set of attributes such as relative market share, growth rates, customer segments served, price/value tiers and required organizational capabilities. A Brand Portfolio Roadmap for a Food and Beverage company may be nuanced from one used by Pharma, for example, but they should always have in common the ability to drive the effective creation, deployment and congruent management of brand assets to achieve top and bottom-line business objectives.  In addition, a thoughtful approach has the potential to provide greater portfolio clarity, enable synergies across brands while concurrently balancing risk and reward. How? Armed with a well-crafted approach and the discipline to act accordingly, you may over time begin to enjoy several key benefits including:

  • Access to new customers, channels, and markets
  • Increased investment efficiencies (allocation and spend)
  • Enriched customer collaboration and consumer relationships
  • Stronger competitive positioning
  • Activation of latent brand assets

Make no mistake, an Integrated Brand Portfolio Roadmap is no panacea for a bloated or misaligned portfolio but it can aptly serve to enlighten broader commercial opportunities. Implementation requires diligence and the discipline to act.  It should also be coupled with organizational change management since it will undoubtedly surface the unexpected and challenge a few “sacred cows.” For example, brands held in high esteem by your retail customers for historical reasons or even from your own trade marketing team may be relegated to less strategic roles with less investment in your revamped brand portfolio. Additionally, due to SKU proliferation, many brands are overly extended on the shelf thereby creating a host of “opportunity costs” for brands experiencing real growth trajectories. Adopting a “shrink to grow” strategy involving a diminished focus on a lower performing brand, or group of brands, paired with a corresponding re-allocation of focus to higher-growth brands generates the best outcome.

Tags: M&A Integration