The impact of mergers & acquisitions on corporate identities and brand portfolios in the automotive industry : A case study of Renault & Dacia

Abstract: The today‟s business world deals with an increasing phenomenon of Mergers and Acquisitions (M&A‟s), a process through which companies gain access to some tangible and intangible resources. Within the automotive industry this phenomenon requires even more attention, since it faced many difficulties during time. This can be seen through the numerous mergers/acquisitions failures, among which it can be mentioned the one of Daimler & Chrysler, Volvo & Renault, BMW & Rover, which were also treated in the thesis. However, although fewer, there are also M&A‟s that became successful, such as the acquisition of Skoda or Seat by Volkswagen, or the acquisition of Dacia by Renault. The last example captured the attention of the study in particular.However, although they are mostly defined by similar characteristics, the mergers and acquisitions mean slightly different things. An acquisition occurs when an organization takes over another one and establishes itself clearly as the new owner, while a merger occurs when two companies, of a similar size, create a single new company owned and operated by both of the parties.The very purpose of the thesis was to reveal the possible impact of mergers and acquisitions regarding the brand perspective in the automotive industry, through the eyes of the case studies mentioned above and the case of Dacia & Renault in particularThe study chose to use an inductive approach, meaning that the researcher had first collected data from Dacia and afterwards, according to the information owned, he developed the theoretical framework. The study is furthermore exploratory, since the researcher sought to explore Dacia‟s approach to branding under Renault ownership.The interesting part consists in the paper‟s findings. First it was discovered that the companies that merge, sometimes face difficulties in establishing the corporate identity of their new formed company. In the case of acquisitions however the process of adopting a new corporate identity applies mostly to the acquired company and overall it is a bit more clear what strategy should the acquired company adopt. On the other hand the paper also identified the M&A‟s impact on the new portfolio. When both are eager to keep their own corporate and product brands, the new portfolio becomes too complex and does not allow cost savings synergies in terms of components equalization, production rationalization or marketing. However, due to the investments that the acquiring company usually makes, the new portfolio can also become more competitive.Regarding the case study on which the paper chose to focus, it was revealed the Dacia‟s corporate brand strategy that boosted its sales and revived its identity. Afterwards it emerged Dacia‟s portfolio consisting of brands that complement themselves and therefore address a wide spectrum of customer needs, and the brands‟ dynamics in time.