Most acquisitions and alliances severely under-perform relative to expectations set at the time of their inception. No matter how great they look on paper, it is always a lot harder to make things come out anywhere near where they were meant to be than it seemed at the start. Fortunately, based on first-hand practical experience and learning from experience of others, there are some things that can be done to raise the odds of success.
The reason for one organization to acquire or ally with another almost always boils down to one of the following three:
- To obtain new products and services to sell to existing customers.
- To secure access to new customers for existing offerings.
- To acquire needed new resources such as skills, leadership or knowledge.
There are also three basic reasons for one organization to decide NOT to acquire or ally with another:
- Most require the buyer to pay a premium price except in distressed situations in which case a bargain price is offset by high risk. Continue reading