Explore the Appropriate Mergers and Acquisitions Strategy

To begin with, after all, from the strategy development realm we get up on the shoulders of thought leaders such as Drucker, Peters, Porter and Collins. The world’s top business schools and leading consultancies apply frameworks that have been incubated by the pioneering work of the innovators. Bad strategy, misaligned M&A, and poorly executed post merger integrations fertilize the organization turnaround industry’s bumper crop. This phenomenon is grounded from the ironic reality that it’s the turnaround professional that often mops in the work from the failed strategist, often delving into the bailout of derailed M&A. As corporate performance experts, we now have learned that the entire process of developing strategy must be the cause of critical resource constraints-capital, talent and time; concurrently, implementing strategy have to take into account execution leadership, communication skills and slippage. Being excellent either in is rare; being excellent in both is seldom, if ever, attained. So, let’s talk about a turnaround expert’s view of proper M&A strategy and execution.

Inside our opinion, the essence of corporate strategy, involving both organic and acquisition-related activities, may be the quest for profitable growth and sustained competitive advantage. Strategic initiatives require a deep understanding of strengths, weaknesses, opportunities and threats, plus the balance of power within the company’s ecosystem. The corporation must segregate attributes which are either ripe for value creation or susceptible to value destruction including distinctive core competencies, privileged assets, and special relationships, as well as areas prone to discontinuity. With these attributes rest potential growth pockets through “monetization” of traditional tangible assets, customer relationships, strategic property, networks and information.

Their potential essentially pivots on both capabilities and opportunities which can be leveraged. But regaining competitive advantage by acquisitive repositioning is often a path potentially packed with mines and pitfalls. And, although acquiring an underperforming business with hidden assets as well as kinds of strategic property can certainly transition an organization into to untapped markets and new profitability, it is best to avoid getting a problem. In fact, a bad business is just a bad business. To commence an effective strategic process, a company must set direction by crafting its vision and mission. Once the corporate identity and congruent goals are in place the road could be paved the subsequent:

First, articulate growth aspirations and see the basis of competition
Second, assess the life cycle stage and core competencies of the company (or subsidiary/division when it comes to conglomerates)
Third, structure a natural assessment method that evaluates markets, products, channels, services, talent and financial wherewithal
Fourth, prioritize growth opportunities which range from organic to M&A to joint ventures/partnerships-the classic “make vs. buy” matrices
Fifth, decide where you can invest where to divest
Sixth, develop an M&A program with objectives, frequency, size and timing of deals
Finally, possess a seasoned and proven team ready to integrate and realize the worth.

Regarding its M&A program, a company must first know that most inorganic initiatives usually do not yield desired shareholders returns. With all this harsh reality, it’s paramount to approach the process having a spirit of rigor.

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