Analysis
Big vs Small –
does size matter?
Jochen Witt follows up on the Cover Story from EW’s previous
issue and a key question raised at the recent
UFI Global CEO Summit in London
his year’s Global CEO
summit in London in
January dealt with an
interesting question,
namely: What influence does size
have on a relative competitive
position?
Would ‘Big’ provide competitive
advantages, or is ‘Small’ the
highly flexible smart speedboat
outmanoeuvering the large tankers?
To anticipate the conclusion: It
depends. This answer, of course,
will be no surprise for the reader.
However, it makes sense to review
some of the recent ‘mega-deals’ and
assess to what extent an increase in
size will likely result in competitive
advantages. For the sake of clarity,
I am not talking here about venue
or show size, but rather the size of a
company.
Let’s start with the largest merger
in the history of the tradefair industry,
the acquisition of UBM by Informa.
Some in our industry, to whom I have
spoken, did not believe the deal was
meaningful, but I disagree, due to the
following reasons:
Firstly, the merged entity can well
leverage the regional presence in the
core tradefair markets. Both Informa
and UBM had a strong position in
the USA and the combined group is
now by far the leading organiser in
the largest market globally. At the
same time, the combined group is
the leading organiser in China, the
strongest growing market globally.
w w w.exhibitionworld.co.uk
Jochen Witt,
President and CEO of Cologne-based
JWC and is a former UFI President
Secondly, the combined company
can leverage their strong existing
customer base and brands by
expanding verticals, e.g. in the
areas of healthcare and pharma,
construction and real estate, fashion,
health and nutrition as well as
jewellery, to name a few. This will
allow for further expansion of
already good positions in Europe,
India and the Middle East, but also in
relatively new regions with growth
potential such as Africa.
Thirdly, when addressing the major
challenges for our industry, scale
will provide competitive advantages:
Data management, digitalisation
and artificial intelligence will all
require major investments in
concepts, technology and people. A
large corporation can leverage these
investments and will also be in a
better position to attract and retain
the necessary talent.
The possibility to realise
cost synergies adds to
the picture even though
it might not have a large
long-time effect.
In summary, I believe
that, in this case, size matters and the
combined Informa group will benefit
from its increased size.
A different picture may evolve
when looking at the series of
acquisitions of PE firm Blackstone.
Over the last 24 months the company
acquired IMC and Clarion (2017),
NEC, PennWell and Global Sources
Issue 2 2019
9