To start, to be honest, inside the strategy development realm we ascend to the shoulders of thought leaders such as Drucker, Peters, Porter and Collins. The world’s top business schools and leading consultancies apply frameworks that were incubated by the pioneering work of such innovators. Bad strategy, misaligned M&A, and poorly executed post merger integrations fertilize the business turnaround industry’s bumper crop. This phenomenon is grounded from the ironic reality that it’s the turnaround professional that frequently mops in the work of the failed strategist, often delving in the bailout of derailed M&A. As corporate performance experts, we’ve learned that the entire process of developing strategy must account for critical resource constraints-capital, talent and time; as well, implementing strategy must take into mind execution leadership, communication skills and slippage. Being excellent in both is rare; being excellent in the is seldom, when, attained. So, when it concerns a turnaround expert’s check out proper M&A strategy and execution.
Inside our opinion, the essence of corporate strategy, involving both organic and acquisition-related activities, could be the search for profitable growth and sustained competitive advantage. Strategic initiatives need a deep understanding of strengths, weaknesses, opportunities and threats, as well as the balance of power inside company’s ecosystem. The company must segregate attributes that are either ripe for value creation or vulnerable to value destruction like distinctive core competencies, privileged assets, and special relationships, along with areas susceptible to discontinuity. With these attributes rest potential growth pockets through “monetization” of traditional tangible assets, customer relationships, strategic real estate, networks and data.
Send out potential essentially pivots on both capabilities and opportunities that may be leveraged. But regaining competitive advantage by acquisitive repositioning is often a path potentially full of mines and pitfalls. And, although acquiring an underperforming business with hidden assets as well as other kinds of strategic real estate definitely transition an organization into to untapped markets and new profitability, it’s best to avoid investing in a problem. After all, a negative clients are only a bad business. To commence an excellent strategic process, a company must set direction by crafting its vision and mission. After the corporate identity and congruent goals are in place the road could be paved the following:
First, articulate growth aspirations and comprehend the foundation of competition
Second, assess the lifetime stage and core competencies of the company (or perhaps the subsidiary/division regarding conglomerates)
Third, structure an organic assessment method that evaluates markets, products, channels, services, talent and financial wherewithal
Fourth, prioritize growth opportunities starting from organic to M&A to joint ventures/partnerships-the classic “make vs. buy” matrices
Fifth, decide where you can invest and where to divest
Sixth, develop an M&A program with objectives, frequency, size and timing of deals
Finally, possess a seasoned and proven team able to integrate and realize the significance.
Regarding its M&A program, an organization must first recognize that most inorganic initiatives do not yield desired shareholders returns. Given this harsh reality, it can be paramount to approach the process using a spirit of rigor.
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