cloud glossary

Everything you need to know to become a wizard of the cloud!

Parent Companies

Parent Companies
Parent companies are the largest stakeholder of a group of smaller companies. This is the highest company on their org chart. In the cloud, many top providers such as Amazon, Google, and Microsoft make hundreds of acquisitions. They become parent owners of the companies that they acquire. This is advantageous as the child company may have a brand and large customer following that the parent company wants to preserve.
in other words
The boss of a bunch of smaller companies.
Shareable Image

Parent company and Hierarchy

It’s important to know who exactly you’re talking to in business to business marketing and sales interactions. Knowing where a target business falls in a greater corporate structure will give you critical insight into how a specific company is run, and who you need to contact to begin cultivating a mutually beneficial relationship. The product or service you have to offer may also determine where in an organizational hierarchy you need to land, or indicate an opportunity to source better leads. 

You need to first understand what corporate hierarchy is and how it influences B2B interactions. Next, you will need to learn more about the hierarchy structures of your potential clients. Where a target business sits within its hierarchy is an important piece of firmographic data to have in your library. 

In this post, we’re going to take a closer look at the concept of parent companies: what they are, how they work, and when you need to know about them. 

What is a parent company?

Corporate family trees are made up of parent, ultimate parent, and subsidiary organizations. A parent company is an organization which owns at least 50.1 percent of stock in a subordinate (subsidiary) business. 

Subsidiary companies report directly or indirectly to a parent company, which maintains some level of control over the subsidiary’s operations, expenditures, and investments. Different parent companies may choose to exercise this control in different ways and to different extent. 

Some parent companies give extensive managerial control to subsidiary leadership, while others run operations almost exclusively through their own boards. In either case the parent company will always maintain some level of  control. 

Amazon is one convenient example of a parent company. The megacorporation owns such subsidiaries as and Whole Foods, overseeing operations and making expenditure decisions for each. 

Parent companies vs. holding companies

Parent companies are distinct from holding companies in that they maintain operational control over their subsidiaries. Holding companies own similar stock in their subsidiaries, but keep a more passive ownership. Holding companies do have some control over operations and can make hiring and firing decisions for their subsidiaries however rarely take greater part in the day-to-day. Holding companies are also protected from significant subsidiary losses, while a parent company may be held liable if a subsidiary goes bankrupt. 

Medical corporation Johnson & Johnson is one example of a holding company, owning assets in numerous subsidiaries including Neutrogena, LifeScan, and Janssen Pharmaceutica. 

Parent domains and internet hierarchy

When doing your firmographic research, it is important to understand and distinguish who you are actually looking for versus selling to. In other words, you may have a target business in your sights, but is there another entity you will need to appeal to in order to make your sale?

Parent companies may hold a number of different vertical and horizontal subsidiaries which are seemingly unrelated, so which subsidiary belongs to what parent may not be immediately obvious. These situations may require a little extra digging to help you understand the hierarchy. Typically the parentage will be listed somewhere on a business’ website. 

More perceptible parent/subsidiary relationships in the digital sphere are identified through a Domain Name Server (DNS) network. Similar to a corporate hierarchical structure, online domain hierarchies include parent domains as well as child domains, often belonging to subsidiaries of a larger corporation. 

For example, is a parent organization and parent domain, with subsidiaries described through child domains as, etc. 

In many cases, your business will need to market and generate a sales relationship with the parent company rather than the target subsidiary. You should aim your communication efforts at parental representatives. 

When is it important to understand parent companies?

Understanding a parent/subsidiary relationship can give you critical data that helps you generate better sales leads as well as targeted marketing materials. It’s also vital to knowing who the main stakeholders and decision makers are, at all stages of your B2B relationship. Here are a few other instances wherein understanding the parent company will make all the difference. 

  • Account mapping requires you to catalog and detail your points of contact at a target organization. Depending on the level of control a parent organization has over a subsidiary, this could involve management from both the parent and the subsidiary, or just the parent. It’s important to have an accurate idea of who is in control when creating your account map.

  • Lead routing, also called lead assignment, involves distributing leads among present sales representatives. How leads are assigned may depend on the hierarchy of a target business. For example if you are selling to a parent company, you may choose to assign those leads to your corporate sales specialists.

  • Reporting may require you to include different information and data sets depending on whether you are working through or with a parent company. Your numeric information, including revenue, expenditure, etc. will differ drastically between the parent and the subsidiary so you will need to know which company is supplying your data. 

Using Intricately with corporate domain hierarchy

Intricately is a comprehensive data management platform that gives you vital and actionable insights into your sales and market leads. Using Intricately, you will be able to identify organizational hierarchies to your advantage and craft effective sales and marketing strategies for dealing with independent organizations, subsidiaries, parent companies, and ultimate parent companies. Request a demo today to see if Intricately is right for you. 

Learn more about other forms of categorical corporate information at our other page: Firmographic data.

Thousands of cloud sales teams use Intricately to find prospects and qualify leads

Get started for free today.