If you take away the millions and billions of dollars in ROI and revenue, consumer behaviour and feedback, and the state of the Stock Exchange and the economy at large, business mergers are relationships at heart – and like all relationships, they require a lot of interpersonal communication, compromise and just a little bit of luck. CastleCS’s team of marketing experts recently investigated why one business merger went on to become a legendary marriage of the minds and why one ended up sacrificed on the altar of bad business decisions.
The Best Business Merger of All Time: Disney – Pixar
If you want to give your business the best chance it has to succeed, you want a marketing partner who knows their stuff and lets you focus on what you do best – your business. If you’re looking for a great example of a business partnership that works, the Disney-Pixar business merger is it.
Disney brought to the business relationship a world-famous name and expert marketing/advertising. Disney’s a powerhouse in terms of gaining the attention of potential consumers – just think about Disney’s spin on a limited-time offer. The Disney Vault call-to-action commercials let consumers know there’s a Disney product (usually a nostalgic item such as “Cinderella” or “The Lady and the Tramp”) available only for a short time before it “goes back into the vault”. Buy it now or miss out is a very effective marketing campaign.
However, Disney heavily banked on the “Classic” Disney – on its well-established brand and well-known products, and though Pixar lacked Disney’s prestige and age-old business acumen, the studio’s animations caught the attention of today’s consumers: young children and subsequently their parents. A business merger gave Pixar the opportunity to benefit from Disney’s business prowess and allowed Disney to once again monopolize the youth entertainment industry, but given the success of the Disney-Pixar merger, this is one marriage of convenience that turned into a love affair.
The Worst Business Merger of All Time: Daimler – Chrysler
Luxury automaker Daimler-Benz – most famous for its Mercedes class of cars – invested in the smallest of Detroit’s automakers, Chrysler, in the hopes of creating a Trans-Atlantic Luxury Car powerhouse that was going to dominate the market. On paper, this business merger sounds like a great proposition, but Daimler-Benz committed one of the worst relationship sins out there: a lack of communication.
Chrysler, by and large, specialises in the economy-class of cars and experts claim that Daimler couldn’t properly market both luxury and economy cars under the Chrysler umbrella, causing tension between the factions. Contrast it with the fairytale business merger of Disney-Pixar and you’ll come to understand that Daimler-Chrysler wasn’t so much a business merger as it was a hostile takeover. Eventually, Daimler sold the Chrysler company for much less than it paid to acquire it, putting an end to this sour love affair.
What’s the take-away lesson from this cautionary tale? That if you want to take your business to the Next Level and make a mark in the business world, you need a partner who understands your needs and concerns, someone who will work with you – and not just for you – to make everything possible.