Question

Topic: Branding

Local Vs Global

Posted by Anonymous on 2/16/2005 at 12:06 PM ET 250 Points
What are the pros and cons, both from an internal as well an external perspective, of a name change for a local company with a global parent company? (the subsidiary would be renamed after the parent company)

Key facts:
Both the subsidiary and the parent company have the same activity.
The parent company acquired its local subsidary some 5 years ago.
The Parent company is number one in the world.
The local company is well known in its native market but has to face fierce competition.
The name of the parent company follows that of its local subsidiary on all official documents and press releases

What would be the impact on the press?
What questions should be asked in an audit?
Will the new entity have more value locally?
What are the main advantages and drawbacks?

Thanx for your insight...
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RESPONSES

  • Posted by Peter (henna gaijin) on 2/16/2005 at 12:29 PM Accepted
    I worked for Raychem Corp. when it was acquired by Tyco International, and we went through this issue.

    Raychem had pretty good name recognition and a strong brand in its markets. Tyco was in a much broader market, but didn't have much name recognition, so Tyco started trying to build a corporate brand.

    So, we considered all sorts of name changes. We realized that changing directly from Raychem to Tyco would have confused some and potentially hurt our sales in the short run if people could not find the products they were used to. But our changing would help the corporate parent as it headed toward its long term goal of improving brand recognition of the parent.

    In the end, we kept the Raychem name as a product brand name (so as to keep some continuity with the old products), but changed to a company name using Tyco. We became "Tyco Thermal Controls", and the products went from boring names like "HWAT" to still boring name "Raychem HWAT". Perhaps this is a possibility for your case?

    Tyco was doing a lot of acquisitions at this time, and not all acquired companies made this change. Those that didn't started using a line below their name saying they are a Tyco Company. If we had done this, we would have been something like "Raychem Corporation, a Tyco International Company". This is another option that would allow you to keep both names.
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