Chapter 11 How do Chinese companies manage acquired international brands?

How can Chinese enterprises build their own brands in the international market?This is the most urgent topic before every Chinese enterprise and Chinese entrepreneur who wants to gain a place in the international market.In fact, in recent years, Chinese companies have tried to quickly establish their own brands in the Chinese market by acquiring the business departments and brand assets of multinational companies in the world.But things didn’t work out, BenQ announced the bankruptcy of its acquired Siemens mobile phone business; TCL, which was also in trouble for mergers and acquisitions, was also struggling... These circumstances all show that Chinese companies’ acquisitions of multinational companies’ brand management are not successful.What exactly is wrong with Chinese companies acquiring brands and business units of multinational corporations?How do Chinese companies manage and deal with the businesses and brands of acquired multinational companies?

When BenQ was preparing to bankrupt Siemens' German business, TCL Group had a black hole of 738 million yuan in losses in the first half of the year. The loss came from the disastrous failure of TCL Multimedia (TMT) in the European market.At the same time, the acquisition of Philips mobile phone business by CLP is also in full swing. TCL, Lenovo, and BenQ are representatives of Chinese companies going international in recent years.A common feature of them is that they have acquired the loss-making business of well-known multinational companies, hoping to use the other party's brand, technology, and channels to borrow ships to go to sea and achieve a great leap forward in internationalization.

In fact, after careful study, we found that the acquisitions of businesses and brands of multinational companies by China's leading companies are all "non-core businesses" of these multinational companies or businesses that have no competitiveness.For example, Lenovo acquired IBM's personal PC business. IBM planned to start transformation ten years ago, turning its brand behavior into an "on-demand" IT service company. Hardware manufacturing and PC business belong to IBM's non-core business, and there are Therefore, IBM intends to sell personal PCs, and Lenovo, a leading domestic IT manufacturer, acquires them.For another example, TCL acquired Thomson, Alcatel and so on.Chinese companies buy businesses that multinational companies think have "declined", and what they buy can be said to be the "past" of these companies.

Also as international mergers and acquisitions, what kind of motives do we find for the acquisitions of multinational companies in the Chinese market?For example, Danone's shareholding and acquisitions in the Chinese market, Robust, Wahaha, Bright, etc. are all top foreign companies in this industry, and these companies all have high growth potential.Another example is that the shares of Tsingtao Brewery acquired by AB Company are all leading domestic companies, and their future growth is very good.From this point of view, the brand acquisitions of multinational companies in China are either for the consideration of market entry, or for the better entry of the brand in the future. The businesses and brands of Chinese companies they buy have good future prospects. Business.

By comparison, we can find out.The international acquisitions and brand acquisitions of Chinese companies are all buying the "past" of multinational companies, while the acquisitions of Chinese businesses by multinational companies are buying the "future" of Chinese companies.This is the biggest difference between Chinese companies and multinational companies in the process of business acquisition and brand acquisition. In fact, in the process of internationalization of Chinese enterprises.Acquisition can be said to be an effective way for Chinese companies to quickly build their brands in the international market.So how do Chinese companies currently operate the brands acquired from cross-border acquisitions?

In the process of cross-border acquisitions by Chinese companies, some companies have the right to use these brands for life, such as Thomson, Rover, etc.; the other is that after Chinese companies acquire the business of multinational companies, Chinese companies enjoy these brands 5 years of right to use.For example, in Lenovo's acquisition of IBM's personal PC business, Lenovo has the right to use IBM's trademark for 5 years. In the case of BenQ's acquisition of Siemens, BenQ also has the right to use the Siemens brand for 5 years.After Chinese enterprises own the right to use these brands, Chinese enterprises generally adopt the following methods to deal with these brand use rights.

First, use the co-branding system first, and gradually transition to your own brand.For example, after BenQ acquired Siemens, it adopted the BenQ-Siemens co-branding strategy; Second, adopt the strategy of own brand and acquired brand. For example, after TCL acquires Alcatel, TCL has the right to use the Alcatel brand for 6 years, and TCL adopts the operation technology of the two brands of TCL and Alcatel; Third, keep the strategy of keeping the original brand unchanged. TCL’s color TVs use Schneider in the European market, Govedio in the US market, and TCL and Alcatel’s strategy for mobile phones, which are sold in domestic and international markets;

Fourth, use the acquired brand first and gradually transition to its own brand. For example, Lenovo's plan in the brand planning process is "the IBM brand will maintain the status quo within 18 months; after that, the product trademark will indicate 'IBM made in Lenovo' three years later. The IBM-Lenovo joint brand appeared; four years later, at the 2008 Beijing Olympics, Lenovo will finally replace IBM at the best time... ". In the process of using these four strategies, we found that Chinese companies have many misunderstandings in controlling the brands of multinational companies.First, there is no distinction between brands.A few years ago, after TCL acquired Schneider, the "Schneider" brand produced by TCL appeared in the domestic market, which has caused confusion with the original "TCL" brand mobile phone image: partly because of product advertising and terminal Confusion in promotion and other product dissemination, the other is that the positioning and product differences of the two brands are not very obvious. For example, in the domestic market, the price and appearance of TCL and Schneider mobile phones are very different. Smaller, Schneider phones appear on TCL's models with cameras.Due to the small differences, Schneider mobile phones did not occupy the mental resources of consumers.

Second, while continuing to use the brand of a multinational company, the connotation of the original brand has been arbitrarily changed, causing consumers to distrust it.For example, after Lenovo acquired IBM's personal PC, it tried to subvert the carbon black of IBM's original Thinkpad notebooks. The main consumers of IBM's Thinkpad notebooks were business people, and its brand connotation was dignified and high-quality. Lenovo By using fashionable metallic colors and smoother contour lines, it attempted to completely subvert everyone's inherent impression of Thinkpad, and the final market reaction ended in failure. From this perspective, IBM's original brand image has penetrated deeply. In the minds of consumers, its brand image is difficult to change. Lenovo's attempt to change its original brand connotation violates the basic foundation of brand management.

Third, Chinese companies are using the brands of multinational companies acquired by mergers and acquisitions, and they have not adopted an attitude of sublation. In fact, many brands do not have much room for survival in these countries and regions, and even quite declining brands. Chinese companies are still in the market. A lot of resources have been invested in these brands. For example, the brands acquired by TCL such as Schneider and Thomson have already declined in the markets of these countries, and there is basically no room for survival. Chinese companies still regard them as treasures.

Fourth, how to grasp the rhythm of the excessive strategy in the process of using the joint brand. Some brands acquired by Chinese companies generally have the right to use them for about 5 years. During these 5 years, how can Chinese companies adopt a good transition strategy? , To make good use of the value of the five-year brand use rights, Chinese companies lack the corresponding experience.For example, for the Siemens mobile phone purchased by BenQ, BenQ’s brand strategy is more radical. It directly uses the BenQ-Siemens brand. Judging from the author’s years of brand consulting experience, this move is more radical. Siemens should be used first, and then gradually from Siemens-BenQ, transition to BenQ-Siemens, and then transition to the BenQ brand, such a series of transition strategies may be more suitable for BenQ. How do Chinese companies use and discard brands acquired through mergers and acquisitions?The author believes that different strategies should be adopted according to the different status quo of the currently acquired brands, the historical status of the brand and the current status of the company's brand. First, adopt a dual-brand system. IBM has always adopted a joint brand strategy in the PC business, that is, Thinkcenter and Thinkpad are prefixed with the three letters "IBM" when they are used, so the computer brand actually recognized by users is "IBM". As for Thinkcenter and Thinkpad, they are It is only a distinguishing mark for different series of products under the "IBM" brand.Five years later, without the three words "IBM", the value of Thinkcenter and Thinkpad is worthy of our careful consideration.At present, Lenovo's brand planning process is "the IBM brand will maintain the status quo within 18 months; after that, "IBM made in Lenovo" will be indicated in the product trademark and the IBM-Lenovo joint brand will appear in three years; four years later, it will coincide with the 2008 Beijing Olympic Games, Will eventually replace IBM at the best possible time...".From the perspective of brand strategy, such a plan is impeccable, but it still faces severe challenges at the implementation level. The biggest problem is how to enhance the competitiveness of the Lenovo brand in the high-end market?The high-end market has always been Lenovo's weakness, and the gap in product quality itself is naturally one of the reasons, but we have seen that its shortcomings in brand building are undoubtedly revealed.Judging from the author's many years of consulting experience, adopting a dual-brand system can better balance the relationship between the two than Lenovo's current plan.The current PC manufacturers all adopt a single brand system in the market (IBM's "corporate brand-product brand" co-branding system also falls into this category). The influence of the brand quickly cuts into the market; the disadvantage is that if it is aimed at different market segments, it is difficult for a single brand to make targeted and precise appeals.Instead of thinking hard about how to replace IBM with "Lenovo", it is better to take advantage of the trend to retain and build IBM's current "Think" into an independent brand.In this way, the original "Lenovo" continues to focus on the current familiar market segments, while the new "Think" fully fills the gap left by IBM's withdrawal. The two brands only need to carry out a slight brand positioning according to their respective market segments. The adjustment can achieve real complementary advantages and non-overlapping.Such a relatively independent dual-brand system makes it unnecessary for Lenovo to think about how to balance different markets within the same brand, especially how to change the low-end image of Lenovo computers that people have established. It is less difficult to build an independent "Think" brand of "IBM-Think" than to completely replace IBM with "Lenovo".As for whether Lenovo's existing brand assets will be wasted, based on the author's years of experience in brand management, Lenovo's intangible assets are much smaller than the $10 billion global market left by IBM.From this perspective, Lenovo's dual-brand system can play a greater role in the brand. Second, abandon the declining brands that have been acquired. In recent years, through mergers and acquisitions, TCL owns many brands. TCL’s ideal brand planning was to accurately position TCL, Alcatel, Schneider, Govedio, Thomson, and Leroy in the domestic and international markets and segment them by market. For example, in the European market, TCL Use Schneider, use Govedio in the US market, and use TCL and Leroy in the domestic market for dislocation competition.The mobile phone uses two lines of Alcatel mobile phone and TCL mobile phone.However, the current status quo is that in addition to the domestic, Indian and Southeast Asian markets, TCL has been operating at a loss in the European and American markets, as if it is in a quagmire.From the author's point of view, in addition to the failure of TCL's brand operation in the European and American markets, the most important thing is that it does not have the talent and ability to control the internationalization of the brand.The most appropriate way to deal with it is, just like Acer withdrew from the North American market back then, TCL gave up its brand operation in the European and American markets, and gave up the operation of Schneider, Govedio and even Alcatel in these markets.Why do you say that?Let's take a closer look. In addition to Alcatel, the value of brands such as Schneider, Govedio, and Thomson acquired by TCL is gradually depreciating. It can be said that the residual value is getting lower and lower. Instead of injecting blood into these brands, it is better to proceed quickly. give up.At present, apart from R&D and design centers, TTE is mainly engaged in sales and management in Europe.The R&D area can be temporarily reserved and slowly transferred to the country.The factory should be closed or transferred to Eastern Europe, focusing on consolidating the domestic market, occupying North America, emerging markets, and Southeast Asian markets. In these markets, the TCL brand will gradually become stronger and bigger, and more experience in brand internationalization will be accumulated. It lays the groundwork for returning to markets such as Europe and the United States. If it tries to linger in these markets, it will inevitably overdraw the reputation and brand equity of the TCL brand in these markets, so that it will be difficult to return to these markets in the future. Third, adopt cautious transitional branding strategies and co-branding strategies.At present, the internationalization strategy of some domestic corporate brands adopts an excessive brand strategy. For example, BenQ adopts a co-branding strategy, but BenQ's co-branding strategy is a bit impetuous.For this strategy, it is very important to grasp the key rhythm of co-branding strategy promotion.After we acquire the business of some multinational companies, we cooperate with them and launch co-branding.By "standing together" with local well-known brands, the popularity and reputation among consumers will be rapidly expanded.This is actually a transfer of credibility.The intensification of market competition often produces some brands with high brand awareness but unsatisfactory sales. If "Made in China" can seize the opportunity and start a joint brand cooperation with it, it will be able to establish its own brand very quickly.But co-branding is actually a transitional brand strategy, which requires when to focus on your own brand and when to focus on the acquired brand. the art of. Fourth, recruit multinational brand management talents.We have seen that transnational brand management is a brand-new historical mission for Chinese enterprises, which can be described as "unprecedented".With such a challenge, can Chinese entrepreneurs who have been fighting in the Chinese local market be up to such a historical mission?The author has reservations.Why do you say that?First of all, the experience of international brand operation is very important for entrepreneurs who carry out international mergers and acquisitions. Only when enterprises have experience in international brand operation can they effectively avoid tortuous explorations and achieve international brand management faster. Secondly, with national vision and thinking horizon, we see that in order to ensure the success of internationalization, Lenovo has hired senior executives from IBM and Dell as CEO. In fact, this is also handing over the responsibility of brand internationalization to these paratroopers. It can be said that this is a beneficial attempt. From this perspective, TCL, SAIC Motor, BenQ, etc., Chinese companies that need international brand management and mergers and acquisitions do need international brand management talents. In short, in the process of international brand management through mergers and acquisitions, as long as we are good at grasping and utilizing the acquired brands and businesses, we can choose the appropriate brand strategy according to the actual situation, and finally make the brand of Chinese enterprises Standing in the forest of the world.