Why Consolidating Brands Can Be a Strategic Mistake.

An Australian company I advise recently appointed a new CEO. She had been the internal candidate and her predecessor had held the position for 15 years.

At her very first workshop, the new CEO’s executive team started putting pressure on her to “tidy up.” The company’s identity, it was argued, had become diluted through its acquisition of multiple brands, each operating as independent businesses. The team singled out one of the company’s higher-profile brands – an insurance company targeted at farming families.  “Many customers don’t even know it belongs to us,” complained several workshop participants.

The new CEO was in two minds about whether to give in to this pressure. She asked me, as an outsider familiar with the company, whether I agreed with her team.

I didn’t. Her dilemma is one I’ve come across before, and in most cases, I’ve found that giving up a well-loved brand in the interest of establishing a corporate identity has backfired – sometimes spectacularly.

Here’s an example.

For two decades, a well-known professional service firm in Australia had offered management consulting and training services under two distinct brands. The founders had originally set up the two brands separately, each with its own website. They had felt that the image of a management consulting practice and that of a training business were quite different.  Although both services had the same customers – managers – the competitors for each were different – McKinsey, Boston Consulting Group and Bain in consulting and a host of organizations in training.

Source.

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