Diversify or Die: Rebrand, Restructure or Rename
- Jul 2, 2021 4:45 am GMT
Countless companies have rebranded, restructured, and even renamed their businesses. Their reasons range from scandal, expansion, public relations, and copyright infringement. Cigarette giant Philip Morris, changed its name to Altria Group Inc. the same day the company was cleared of responsibility in a smoking-related wrongful death case. The World Wrestling Federation, previously known as WWF, was sued by World Wildlife Fund for use of its initials. Smith & Wesson Holding, changed its name to American Outdoor Brands in response to the volatility of the firearms market. Still, others make the switch to define identity, diversify goals and expand profitability. These are primarily the reasons behind Sempra Energy’s name change. The company will drop ‘Energy’ from its name, moving forward simply as Sempra. The company said it “refreshed its brand to create better alignment with the company’s North American infrastructure strategy.” They also no longer want to be associated with the view that ‘energy’ is connected to companies increasing greenhouse gas emissions and pursuing exploration and development of fossil fuels. Sempra’s subsidiaries do integrate renewable energy sources into their power mix but natural gas has been a major part of their portfolios. CEO Jeffrey W. Martin said, “On the one hand, we’re facing the challenge of rising global CO2 emissions with potentially dire impacts to our environment. And on the other hand, there’s a need to meet the rising demand for energy as economies all across the globe continue to expand.” The company intends to address both challenges while taking full advantage of their strategic positioning. "In the last several years, we have realigned our portfolio with the objective of simplifying the business while improving our financial results – and it is paying dividends," said Trevor Mihalik, executive vice president and Sempra CFO. By modernizing the brand the company strives toward their vision to deliver ‘energy with purpose.’ Paul Patterson, utilities analyst in New York City with Glenrock Associates, said Sempra’s name change is cosmetic. However, Sempra is not alone in their efforts to reinvent themselves cosmetically or otherwise. NextEra Energy Inc. continues to expand its portfolio as a leader in wind and solar power. Black Hills Corp. filed an Integrated Resource Plan to add 100 MW of renewable energy and up to 20 MW of battery storage. “We are committed to delivering safe, reliable and cost-effective energy to our customers while sensibly achieving a cleaner emissions profile,” says Linn Evans, president and CEO of Black Hills Corp. “Our plan looks to meet the growing needs of our customers and communities and address the challenges of the evolving energy grid through existing technologies.”
An evolution is imperative but to avoid a rebranding flop, companies will have to apply 'the goldilocks principle’ to get everything just right. Earlier this year, Duke Energy rejected Elliot Management’s proposal to break up the company. Duke Energy is confident business is stronger and more impactful as a consolidated, standalone entity that remains as one. Whether you’re rebranding, restructuring or renaming your company, it's apparent the utility business model will continue to adopt a vast array of changes. After all, Sony, Firefox and Yahoo just work better than Tokyo Telecom. Engr. Corp, Firebird and Jerry’s Guide to the World Wide Web.
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