Do Corporate Name Changes Work?

February 3, 2013 in Daily Bulletin

Earlier this week the company Research in Motion announced that it was changing its name to Blackberry as it struggles in a marketplace ruled by Android, iOS, and Windows Phone. Brian Palmer explored the history of corporate name changes:

  • Studies suggest that corporate name changes usually either have no effect on the subsequent success of the company or a mildly negative effect.
  • The few companies that do succeed usually do it because they started off as a small businesses with a local name, and are now so successful they need a global brand. Hence a company called Tsushin Kogyo changed its name to Sony to find success around the world.
  • Businesses whose stock prices fell prior to a name change usually see the price continue to fall for the next three years.
  • Moreover the former Research in Motion has now linked its reputation to just one product: Blackberry. If the product fails then the whole company will be associated with failure.

Read more about the types of name changes that are successful, companies that have bucked the trend, and why the Blackberry name is already off to a bad start over here.

Source: Slate