Mr Katyal started by emphasizing on how strategic decisions are taken by firms in acquiring a brand, valuing it and the challenges in integrating it into the firmas business. Organizations go for acquisitions so as to derive strategic benefits of growth (geographic reach & market share), to extend the breadth and depth of product lines, to overcome competition or for operational efficiency. Various types of valuation methods and the other dynamics involved in brand acquisition beyond the price factor were discussed.
Narrating the story of Nihar, Mr Shailendra spoke about how Marico (with Parachute) and HUL (with Nihar) were amidst intense rivalry since 1997 in the coconut hair oil market. Finally in 2006, HUL as part of its aPower Brandsa strategy decided to divest Nihar, because as a brand, Nihar only had a strong regional focus in eastern India. Subsequently, Marico acquired Nihar, but it faced challenges in integration as both Parachute and Nihar compete for the same market and are very similar products.
Marico, with planning of short term and long term objectives was successful in integrating Nihar and attaining growth in the segment. Mr Katyal explained why managing the time to market and managing the turmoil in the distribution channels during the change of ownership of Nihar to Marico was identified as key areas that required quick and focused planning.
The session concluded with a question and answer session in which Mr. Shailendra answered questions raised by students on various decisions. In response to queries, he elaborated on how Parachute and Nihar were offered as differentiated products to consumers so as to manage portfolio conflicts.