Strategy, Strategy Development and Strategy Execution
An M&A strategy is usually about the non-organic portion of a growth strategy or about the divestiture of non-core activities. In this context "transactions" represent no stand-alone value; they are simply tools for implementing the structural change associated with a strategic option – suitable in some situations and not in others.
Not at all!. Managers initiate acquisitions with an incentive to build size rather than value, corporate boards approve transactions without understanding the organization's ability to execute an upcoming integration and advisers support a merger when a strategic alliance could solve the issue with a fraction of the risk and capital.
These are just a few examples of poor judgment. They occur because boards and managers have insufficient knowledge of the interface between strategy and M&A – and because advisers focus on methods rather than on client needs.
Consequently, matching the right M&A tool to the actual situation is a key to build lasting shareholder value.
The below illustration is from White Paper #2, which discusses optimal use of the various M&A tools:
Other Relevant Articles
See Download Center: White Paper #2: Strategy - and the Proper Use of M&A Tools; or White Paper #3: Strategy and Implementation - and the Lack of Results.
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