Developing the Right M&A Strategies to Take on New Competitors

Blake Hansen

Senior Consulting Partner, M&A, Consulting, TCS

Highlights

Enhance your M&A strategies to fit your company’s growth profile and take on new competitors.
Build a trusted M&A advisory team to accelerate deal due diligence and capture great opportunities.
Today’s market shifts are accelerating changes and creating a more urgent need to develop the right M&A strategies to stay ahead of competition.

Improve M&A outcomes

The business world as we know it, no longer exists.

Every industry is being redefined by new technologies that blur the lines of the physical, digital, and biological worlds. These shifts are accelerating change like never before, creating great opportunities and risks. Business practices are also rapidly evolving, becoming automated, intelligent, agile, and ubiquitous-what TCS calls Business 4.0™.

Mergers and acquisitions (M&A) have always been a part of every business strategy. In today’s era of rapid transformation, mergers, acquisitions, and divestitures have become powerful tools to capture new customers, compete more fiercely, and eliminate assets that no longer enable competitiveness.

Create your M&A strategy

Based on our experience, we have identified four dominant M&A strategies.

Most companies embrace one as its primary M&A strategy and are opportunistic in the others:

Optimizers focus on improving existing products, services, and business practices to maximize customer satisfaction and profitability.
Transformers take an inside-out approach, seeking incremental innovation on existing or improved technologies, to actively capture new customers and markets.
Explorers take an outside-in approach, investing in leading-edge technologies and external innovation partners to expand customer capture and create new industries.
Revolutionaries take the boldest steps. They seek ways to disrupt and cannibalize so that they can take on new competitors, capture new markets, and create new industries.

Successful M&A is a combination of good strategy and great execution. TCS recommends an approach, such as the FITME framework, which can help companies evaluate options and create the M&A strategy that’s right for them.

FITME framework for M&A

Helping companies get their M&A strategy right

An illustration of the FITME framework for developing a strong M&A strategy. Whether they are Optimizers (that focus on improving existing products and services to maximize customer satisfaction and profitability), Transformers (that take an inside-out approach, seeking incremental innovation to actively capture new customers and markets), Explorers (that take an outside-in approach, investing in leading-edge technologies and external innovation partners to expand customer base and create new industries, or Revolutionaries (that seek ways to disrupt to take on new competitors, capture new markets, and create new industries), companies can use the framework to get their M&A strategy right. With the right balance of focus, innovation bias, tech strategy, market interaction, and ecosystem emphasis, they can create a strategy that fits their company’s growth and risk profile.

Accelerating deal due diligence

In today’s world of low-cost capital, competition for M&A opportunities can easily come from competitors willing to make decisions with limited data.

Accelerating deal due diligence is crucial. To speed up the process:

Build a trusted M&A advisory team with the right industry, operational, and technology knowledge to be engaged at the earliest stages of M&A exploration. This team will likely be a combination of internal and trusted third-party experts.
Establish risk thresholds to address unknowns. Managing risk is a part of evaluating every M&A opportunity, especially when acquiring cutting-edge technologies or entering new markets. Companies waiting for concrete answers will likely find themselves out-flanked by more nimble competitors. Defining likely risks and rapidly testing ‘Go-No Go’ tolerances will accelerate decision making.
Give the CIO a starring role. Business and supporting systems are no longer separate considerations. IT cannot make an M&A deal, but certainly can break one. When it comes to the potential system impact of an M&A opportunity, the best person to make that judgement is generally the CIO.  Engaged early, the CIO can quickly assess compatibility and identify pitfalls and deal breakers.
Formalize your playbook. Every company should have an M&A playbook that scripts the activities for due diligence, M&A planning, financial modeling, execution, and synergy management. A good playbook also describes the roles, both internal and external, to execute these scripts. For due diligence, pre-defined assessment and analysis frameworks can greatly accelerate the process.

In business, time to market is everything. Creating the M&A strategy that fits your company’s growth and risk profile will provide clarity on where to capitalize on opportunities that enhance competitiveness. Then, by adding your own due diligence accelerators, you can quickly evaluate and exploit the M&A opportunities that best advance your strategic ambitions and business outcomes.

Meet the author

Blake Hansen

Blake has led numerous M&A, optimization, and transformation initiatives with Fortune 500 and Global 2000 companies. He specializes in assisting CXOs with enhancing business performance through both business and technology. He has worked across numerous industries and countries.

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TCS works hand in hand with world-leading investors.

TCS is here to make a difference through technology.

We’re in it for good, driving positive change for the benefit of all.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

Recent News

Recent recognitions

TCS works hand in hand with world-leading investors.

Develop the right M&A strategies to gain a competitive edge

Highlights

In this article

Improve M&A outcomes

Create your M&A strategy

FITME framework for M&A

Accelerating deal due diligence

Meet the author

Blake Hansen

TCS is here to make a difference through technology.

We’re in it for good, driving positive change for the benefit of all.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

Recent News

Recent recognitions

TCS works hand in hand with world-leading investors.

Highlights

In this article

Improve M&A outcomes

Create your M&A strategy

FITME framework for M&A

Accelerating deal due diligence

Meet the author

Blake Hansen

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