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Rebranding Twitter was the Second Worst Branding Decision of 2023
Elon Musk renaming Twitter because he is obsessed with the letter X was the second worst branding decision in 2023. The first was UBS’ decision to completely subsume Credit Suisse. Credit Suisse was founded 168 years ago and its wealth management services were known around the world. The majority of external pressure was for UBS to let Credit Suisse live. The reasoning was that the competition benefits customers and Switzerland needs to avoid making a too big to fail bank even bigger. A major yet lesser mentioned reason is that Credit Suisse disappearing has hurt Swiss pride.
Nonetheless, the politicians that forced the sale lost their right to decide. And despite what UBS says, UBS does not have to consider Swiss pride or competition in their decision.
Our analysis clearly shows that a full integration is the best outcome for UBS ... and the Swiss economy
I do not doubt that it suited UBS in the shorter term to absorb Credit Suisse but I think in the long run they could have been more profitable and robust by letting it live. I am aware my off hand speculations would most likely be destroyed by the top level banking executives who understand the business and checked the numbers.
Credit Suisse was mismanaged and the fleeing deposits showed the brand damage. But UBS was bailed out in 2008 and is now telling the world "Banking is our craft". From that we can see the Credit Suisse brand was not irreparably damaged.
Peter Thiel teaches us that monopoly is good. Surely then a fake market is even better for a business than a monopoly? A friend once told me to use agoda rather than booking.com because you find better deals (guess who owns agoda). Would you like a Louis Vuitton or Christian Dior bag? Swatch Group centralises all its production of watch mechanisms while the marketing and product design is outsourced to the individual brands.
Banking is more complex than watch making. But integrating the systems should have been possible. UBS has bought 370 institutions in its history. Aborbing banks is what big banks do.
Historical mergers in the US and UK where brands are fully absorbed have been able to retain the marketshare of their newly acquired brand. The alternative of leaving the existing brand and integrating the systems has also worked. See GPT for details. So in the long run, should UBS have absorbed and kept the brand? Or absorbed and killed it?
When UBS merged with SBS in 1998 they intially kept the marketshare. Until 2008 when they forgot that banking was their craft and bled clients to the cantonal banks. If that happens again, they will be saved by the government. But then they will lose their share.
If they had kept Credit Suisse, even just the logo, UBS could have given us a choice of bank and made all the profits anyway in good times and bad.