Exhibition World Issue 2 — 2019 - Page 9

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