PIERRE KLEINHOUSE
Case Study: Prune the Brand Portfolio?
After a large acquisition, the CEO decides whether to prune the portfolio.
December 13, 2017
Summary.
A fictional hotel company just finished a year-long, $9 billion acquisition, which means it’s now the second largest lodging company in the world with nearly 4,800 hotels and just over 1 million rooms in 100 countries. The merger left the firm with 21 brands in its portfolio, including a handful that overlap in terms of positioning, price tier, and geography. When the acquisition was first announced, the CEO had said in a press conference that they probably didn’t need all of the brands but didn’t have any plans to shed any of them any time soon. Now he’s getting pressure – both internal and external – to make a different decision. With the acquisition complete, is it time to prune the portfolio?