Mergers & Acquisitions - How Do They Aid Strategic Agility
Most
companies today, believe Mergers & Acquisitions are an effective
way to strengthen a business. It contributes to the synergies of organizations,
increases operations, accelerates the delivery of quality work, and increases
market share. Key mergers & acquisitions are a part of every other corporate
giant’s strategy. It helps the big companies take over large market shares with
diversified products and services. It gives them access to newer technologies
and allows the upcoming companies to penetrate deeper into the market, be part
of an innovative change, and improve their offerings. There is one process that
is elusive to most businesses which can be made possible by mergers &
acquisitions – strategic agility.
Agility
refers to an organization’s capacity to continuously update and reinvent itself
to stay relevant in the marketplace amidst a volatile environment. Companies
that are strategically agile are able to make quick decisions, create
distinctive portfolios for themselves, and line up a diversified business
model, along with improved products and services. To be strategically agile,
companies need converging forces to create opportunities and take advantage of
the changing market conditions. Their ability to deploy the right resources,
deploy effective solutions, and create transformations in the business with
collective commitment, are key. And this is possible with mergers &
acquisitions.
There
are different kinds of acquisitions
that help businesses achieve strategic agility – platform and bolt-on
acquisition. A platform acquisition is when a private equity group takes a
company into consideration, in which it is investing through an acquisition, in
a new market space as a beginning point for further acquisitions in the same
industry. A bolt-on acquisition is when a private equity-backed company acquires
another company in an attempt to increase the value of the former.
These
kinds of Acquisitions
can improve strategic agility in many ways. When managed efficiently,
acquisitions can enhance the addition of varied capabilities and innovations
which in turn boosts the brand’s strategic agility.
Acquiring
companies usually pay the current market value of the brands that they buy
over. A merger between two companies benefits not just the employees but also
the shareholders when the post-merger market price of the company shoots up.
This increases the value of synergy between the two organizations, thus paving
way for better decisions at the higher level & delivering innovation. This
also contributes to achieving strategic agility.
Unique
ideas can fly in from anywhere. It is also easier through Mergers & Acquisitions.
It accelerates better R&D and innovations while also helping both the
companies stay afloat amidst changing market conditions. The organizations
always have to be ready to explore and implement these ideas and innovations in
order to truly achieve strategic agility.
Looking
for consultants who can help your business with mergers & acquisitions? Zinnov helps technology providers with
targeted Mergers & Acquisitions by identifying the best fit companies.
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