Companies are pursuing M&A in order to compete with the likes of Amazon, Facebook, and Google, and stay relevant with consumers. Technology is transforming multiple industries – not just media and telecommunications – but also healthcare, food and beverage, and automotive. Deals by strategic acquirers from a wide array of industries reached a record $200 billion in November.
There are a number of examples from recent months: In reaction to Amazon’s acquisition of Whole Foods and increased competition from online meal-kit providers, traditional players are executing deals. Albertsons invested in Texas-based grocery chain El Rancho Supermercado and acquired Plated, while Nestle bought a minority stake in Freshly. Car manufactures like GM and Ford are partnering with Lyft to compete with Waymo, formerly owned by Google’s parent company, and Uber in the driverless car market. CVS’s offer to acquire Aetna was driven by talks that Amazon would enter the pharmacy space.
With such a dynamic environment, companies are finding acquisitions an effective tool for growth. Here are three ways strategic acquisitions can help you remain competitive.
- Adapt Quickly – Acquisitions can help you adapt to changing market dynamics more quickly than developing your own solution in-house. In acquiring, you can buy a company with a read-made solution and existing customer base.
- Follow Customer Demand – Anticipating demand and meeting the desires of your customers is important for long-term success. In buying another company you can expand your offerings to ensure you continue fulfilling your customers’ needs. For example, acquiring a complimentary product 1234.
- Gain Expertise – Rather than individually recruiting and hiring each team member, acquiring can let you bring in a group of talented individuals with expertise in a particular field at one time. Bringing critical knowledge inhouse through an “acqui-hire” can provide your company with important capabilities to develop cutting-edge solutions.
M&A is a useful and effective tool for growing your company, adapting rapidly to changes in the marketplace and remaining competitive.
Are you ready for M&A? Take the Acquisition Readiness Assessment now for free.
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