Investigating the Effects an Acquisition has on Brand Equity
MORRISON, P. and ATKINSON, D. (2018) “Investigating the Effects an Acquisition has on Brand Equity”
34th International Scientific Conference on Economic and Social Development – XVIII International Social Congress (ISC-2018), Russian State Social University, 18th to the 19th Oct.
This paper was written by Patrick Morrison and his tutor David Atkinson, and was presented at this conference in Russia.
This study aimed to understand the impact and effects acquisition events have on an organisation’s brand equity. The literature highlighted a lack of pertinent research into the effects company acquisitions have on consumer-based brand equity (CBBE), especially what impact and consequences there may be on a brand that is acquired by another. This report investigated the overall acquisition process and proceeding effects the process had on an organisation’s CBBE. In order to achieve an in depth understanding, a case study approach was used. Here Rapha Racing Limited (RRL), a UK based up market manufacturer of cycling clothing and accessories for road riders, was explored. RRL was cited as it had recently experienced a £200 million acquisition by two heirs of the Walmart family. Primary research within the case took the form of surveying RRL consumers, interviewing RRL employees and a senior professional, who has been involved in numerous, high value company acquisitions. This multiple perspective approach allowed an insight into how RRL managed their brand throughout the acquisition and whether RRL managed to match, misjudge or exceed consumer brand expectations. This report found how RRL steadied the ship through a clear internal communication strategy with complete transparency between leadership and staff. However, it was found that RRL failed to apply the principle of transparency in their communications with consumers. The paper concludes that careful consideration of the acquiring party, protection of current business culture and systems as well as transparency with existing customers are vital components in controlling an organisation’s brand equity with an acquisition event.
Keywords: Acquisitions, Consumer-based Brand Equity, Rapha Racing Limited