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Thoughts from MCAA, part 4
May 25, 2007

Yesterday I started the discussion of what a company does after it buys somebody else. Leopold Streit from Siemens said that they had various choices of what to do with Controlotron products once they moved into Siemens' portfolio:

1. Maintain the original branding, i.e., "Controlotron, a Siemens company" which would use the same name, trademarks, etc., as the original in order to maintain market recognition and continuity.

2. Lose the original branding and make it Siemens from the start. Re-brand the product and renumber it according to Siemens standards. This is more typically the approach when the buyer is better known, and what Siemens did in this case.

(There are some variations that fall between these two, but usually companies follow one or the other.)

If you Google "Controlotron," you will find references to their old Website, (www.controlotron.com) but if you go there it takes you to Siemens. In this particular case, Controlotron did not have additional products that duplicated Siemens offerings. However sometimes the acquiring company ends up with more than it can use. Often those "orphaned" products are sold off or simply killed to avoid needless duplications. Streit did note that Siemens kept some of Controlotron's product numbering scheme for the sake of long time users, but adapted it to Siemens larger product designation strategy.

In this case, Controlotron offered a product family that complimented Siemens' offering but was not a direct competitor. Buying a competitor is a different matter, as Streit observed. He said that Siemens' purchase of Moore Products was more complicated, and admittedly not as successful, but he didn't go into more detail. That discussion might be an interesting one to pursue someday.

If you're an end user, you will be left to deal with whatever course the purchaser chooses. If the products you need are things that you don't buy often and you lose track of the old company, you might make another choice entirely. That's the real risk. It's critical for the company that makes the acquisition to maintain all the paths to the old company for many years after the merger. But, usually once it happens and critical customers are fully up to date on what's happened, things do work out and life goes on. Hopefully you aren't depending on the availability of one of those orphaned products.

Posted by Peter Welander on May 25, 2007 | Comments (0)