Corporate image and reputation play major roles in what sells a company and its products—and at what prices. Whether a company is the hunter or the prey, a strong corporate image can have a profound impact on both short-term financial results and long-term corporate growth.
A strong corporate reputation paves the way for a growth-oriented leadership team and board of directors to acquire competitors. At the same time, a positive corporate image makes the acquisition of a company more costly to the hunter and more beneficial to the existing owners.
LEVERAGING REPUTATION, GOODWILL
Consider the example of one growth-oriented company. It effectively used a blend of strategic communications through its initial public offering and as it acquired 28 companies in 18 states over three years. The strategies included local, trade and financial media media/spokesperson training, industry analyst relations, standardizing the corporate identity of acquired companies, trade show support, crisis communications and public affairs.
Many of the acquisitions included small-to medium-sized businesses. Most had a valuable local presence: visible and long-standing. In these situations, it was particularly important to communicate effectively and leverage the goodwill these companies had earned with employees, customers, suppliers and the local communities they called home.
STRATEGIC VERSUS ECONOMIC
Each merger and acquisition is unique and requires specific communications strategies and tactics to support the business objectives of the transaction.
In acquisitions where the main business objective is economic, many of the communications challenges may revolve around such issues as job losses, benefit changes and possible plant closings. If the acquisition is strategic, the challenges may revolve around internal communications and bringing together the two corporate cultures, positioning the transaction internally and externally as a catalyst for growth and development for the acquired company.
The nature of the company’s local ownership also plays a role in the communications surrounding the transaction. Perhaps a local family with a proud history and presence in the community owns the company. The level of concern among local target audiences will be much higher and more sensitive.
The concerns among local suppliers and vendors about what the future holds under the new owners must be addressed proactively. Local community leaders and public officials likely will be very concerned about the new ownership’s continued “civic commitment and community involvement.” Employees of the acquired company may be comforted by the new owners’ pledges to make few changes, but the family-owned company environment they have worked in for years is about to change nonetheless.
Failing to consider the issues and concerns of these audiences and addressing them through proactive communications can affect the true value of the transaction, both in the short and long terms. Indeed, the corporate image and reputation of the companies involved in the transaction are important assets to leverage throughout process.
Strategic communications is an increasingly valuable ingredient in the overall merger and acquisition process. With its versatility, aptitude for drama and a capacity to break through the communications clutter, strategic communications capture the attention and hold the interest of a variety of target audiences affected by the transaction
In the social media world today, external forces including advocacy groups, the media, regulators, politicians, industry analysts and community leaders, have a much larger impact on how a company sells its products, how it conducts its day-to-day business and how it is perceived in the marketplace. Strategic communications can influence all of these external forces with its unique ability to add third-party credibility to virtually any company or product message.
How can strategic communications make your next deal more valuable?
For the hunter, it's just a meal. For the prey, it's a matter of life and death! Same game, different stakes! - Author: Poornima Dhiman