Verizon will acquire Straight Path Communications for $3.1 billion, beating out AT&T’s initial offer of $1.25 billion. The primary driver for the deal is accessing Straight Path’s millimeter wave spectrum which will be key to building a faster 5G network.

Disruptive technology and evolving consumer habits are reshaping the telecommunications industry at a rapid pace and both Verizon and AT&T have used acquisitions to stay ahead of the curve. AT&T recently acquired Time Warner for $85 billion to gain access to its content including HBO and CNN and Verizon acquired Yahoo! for $4.83 billion to boost its digital ad business.

Consumers are dropping landlines and cable TV and moving toward online streaming, especially on mobile devices. Social media has also reshaped where viewers get information and entertainment and media companies are struggling to adapt. For Verizon, using acquisition in along with organic growth, will help the company build an infrastructure to stay relevant with consumers. A 5G network will have higher speeds and greater capacity to keep up with downloads, video streaming, and other smart devices like Alexa, Google Home, or even automated vehicles. Companies that can anticipate and capture future consumer demand will remain successful and continue to grow, while others will be left behind.

Leaders in all industries should be aware of this dynamic and consider capturing future customer demand as a major driver for strategic growth. This means giving customers what they need and also what they don’t know they need. Amazon does an excellent job of this by suggesting items in their follow up emails base on strong algorithms. Think about how you can apply this principle to your current customers and your potential future customers and how you will go about fulfilling their needs.

Photo Credit: Mike Mozart via Flickr cc

All companies, even those that are profitable, face pressure from today’s economic environment.  Whether its regulator hurdles, increased competition, geopolitical risk, or new technology, the world today is constantly changing.

Unfortunately, many companies realize this too late and “suddenly” find themselves in an impossible situation that is incredibly difficult to reverse. The best way to avoid this fate is to take a proactive rather than reactive approach to facing business challenges. This way, you can spend the appropriate amount of time preparing your strategy for growth, whether that’s divestment, acquisition, or organic growth, instead of hastily making a panicked decision or naively hoping for the best. While there’s no way to control the macroeconomic environment, companies that thrive are able to anticipate change and craft their own growth strategies rather than letting the market dictate their path forward.

Those of you who are struggling may need take a serious look at your growth options and consider doing something different than business as usual. This may mean boosting organic growth, minimizing costs, exiting a market, or exploring external growth and acquisitions. If your company is in a strong position today now is the best time to build on your strength. Continuously assess market trends and future demand in order to adapt as needed and position your company for long-term growth.

Photo Credit: Cory Denton via Flickr cc

Sears, which was once a thriving department store, is dying a slow death and the company is grasping for cash in order to stay afloat. Last year, Sears borrowed $200 million from CEO Eddie Lampert’s hedge fund and most recently Sears agreed to sell Craftsman to Stanley Black & Decker. Under the terms of the acquisition Sears will get a cash payment of $525 million followed by a payment of $250 million after three years. It will also receive royalties from the sales for Craftsman for the next 15 years. Stanley Black & Decker is focused on strengthening its position in the tool market. In October 2016 the company announced it would acquire the tool business of Newell Brands, which includes Irwin, Lenox and Hilmor, for $1.95 billion.

From Success to Struggle

So how did Sears go from successful department store to its current situation? Of course many retailers have been hit hard – not just Sears. Faced with competition from online stores, traditional retailers are struggling to keep up. Macy’s is in the process of closing 100 stores in order to cut costs and Walmart is now offering free two-day shipping when shoppers spend at least $35 in order to compete with Amazon.

But, we can’t blame everything on competition. Competition is the very nature of business and there will always be changes to in the industry, which are beyond your control. It’s up to leaders to anticipate these changes and proactively develop a strategy in order to survive and even thrive when times are tough. Instead, Sears did nothing. Sears is not the only company to fall into this “strategy.” When things are going well, or at least satisfactorily, it’s easy to get comfortable and keep doing the same thing.

However, the result of doing nothing can be disastrous for your business. Think about Montgomery Ward, which was the Amazon of the 1800s, accepting and delivering orders by mail. But now the company doesn’t even exist. If Sears wants to avoid the same fate, it will need to be more innovative to fix its long term growth problems. Getting cash now is a temporary solution and it will be interesting to see what steps the company takes once they get the cash.

Are You Doing Nothing?

For business leaders today, I urge you to take a serious look at your business and marketplace. Don’t let yourself get too comfortable or get too caught up in the day-to-day tasks that you neglect the bigger picture. Any company that doesn’t remain on its toes can succumb to doing nothing.

No matter your current situation, you should always think about what could happen next and question your assumptions. Just because your plan works now, doesn’t mean it will work in the future. Where might the market be headed to tomorrow? In five years? Set aside time to look at your business strategy to make sure you answer these questions.

Photo credit: Mike Mozart via Flickr cc

Are you thinking about growing your business? In any business endeavor, having the right questions is often half the battle.

Join us for a new webinar on “7 Strategic Questions to Ask Before Pursuing Mergers & Acquisitions” on Wednesday, December 7. We will cover 7 powerful questions that have been tried and tested with dozens of clients at the outset of their growth programs:

  1. What business are we in?
  2. What is our core competency?
  3. What are we not?
  4. Where is our pain?
  5. What are our dreams?
  6. What is our risk tolerance?
  7. What is our company DNA?

Explore each question in depth and learn how they have immediate applications and a direct impact on your growth strategy.

After attending you will be able to:

  • Establish a firm foundation for pursuing strategic M&A and external growth
  • Use tools to examine your current business situation
  • Begin to develop an action plan for growth

Date: Wednesday, December 7, 2016

Time: 1:00 PM EST – 2:00 PM EST

CPE credit is available.

Photo credit: Ryan Milani via Flickr cc

One of the best ways to grow a business is by exploring different options. You and your leadership team should be willing to discuss and consider new ideas without being intimidated by the unknown or risk. Clinging to business as usual may feel comfortable now, but you may regret it years down the road when your business is struggling to adapt to a changing market. Exploring new opportunities may unlock untapped potential for your business; at the minimum, it will validate your current strategy.

I invite you to embark on this journey of exploration in our webinar, “Five Options for Growth,” on Wednesday, August 19. After this webinar you will be able to:

•Define the five growth options for your company
•Explain why external growth (acquisitions, joint ventures, etc.) can be the best option for your company
•Describe the current state of the M&A market using relevant statistics and indicators
•Begin to develop a formalized step-by-step M&A process for your company

CPE credit is available. Click here to learn more and register.

Most companies are seeking growth outside of their core business through organic means or mergers and acquisitions, according to a new survey by McKinsey.

What’s interesting is that although many companies want to expand beyond their mainstay business, most do not have the capabilities to do so. Here are three best practice steps noted for successfully growing in new categories:

  1. Scanning for expansion opportunities
  2. Evaluating expansion opportunities
  3. Integrating new activities into core business

By following these best practices, companies are two times as likely to be successful; however, McKinsey reports that only between 27% and 33% of those that they surveyed did so.

When it comes to exploring new opportunities, business leaders are often too caught up in day-to-day activities to think about the bigger picture. Many are overly concerned with their competitors or simply are at a loss when it comes to generating new ideas for growth. This also means that once an opportunity is identified, it’s often the only one considered – so of course, the company has trouble properly evaluating the single opportunity and determining whether it is a good fit. And if an opportunity is not the right fit, there will be difficulties in integrating it into the core business.

If you find yourself in a similar situation, or simply wish to improve your capabilities, here’s some advice to help with your growth efforts.

  • Start with strategy – It should go without saying, but strategy is key to success. The survey emphasized the importance of having a clear, long-term strategy: “When executives say their companies have a clear strategy for expanding into new activities, for example, they are four times more likely than those whose companies have no such strategy to report significant value creation.”
  • Consider all your growth options – Did you know there are FIVE options for growth? They are: organic, external, minimize costs, exit, and do nothing. While you may be leaning toward one of these pathways, it’s best to consider it in the context of the others. This gives you a chance to seriously evaluate all of possibilities and provides a more complete picture. By considering all five options, you will either gain confidence about the decision you’ve already made or uncover a new path for growth.
  • Use tools to generate ideas – We use tools like the Adjacency Map and the Opportunity Matrix to generate, organize and evaluate new opportunities. We find that a brainstorming session using these tools gets the ideas flowing. No idea should be off the table, no matter how remote or crazy it may seem.
  • Evaluate opportunities with criteria – Develop criteria that match your ideal opportunity. Which aspects are most important to you? Market size, demographics, technological capabilities or something else? For example, if your overall strategy is to expand into Latin America, location is clearly important. Those opportunities that allow you to expand south of the border will be evaluated more favorably that those that don’t. Once your criteria are established, compare all options against the same criteria. This will help you remain objective and strategic.
  • Develop an action plan – You need a clear plan for executing and integrating the newly acquired business (or new product or capability) with the rest of your current business. For M&A, especially, integration is the number one reason for failure – so start planning early. Your plan should, of course, be guided by your long-term growth strategy.

If you’d like to continue exploring your options for growth, download your free copy of “Finding Opportunities for Growth: The Opportunity Matrix.”

 

Have you considered all your options for growth?

I have found that some leaders are limiting their potential for company growth because they fail to examine all the possible ways to achieve it.

Some are stuck in copycat mode, constantly mimicking the strategies of their competitors and playing catch-up. Others struggle to come up with new ideas. Even leaders of companies that are growing may be missing out on key opportunities.

Five key options to consider when it comes to company growth are organic growth, minimizing costs, external growth, exiting the market and doing nothing.

Even if you think you know which option is best, I recommend you consider them all to create a complete picture of the possibilities that lie before you. This equips you to make an informed decision about the best way to grow your company.

Capstone will be exploring the five options for growth in our upcoming webinar on December 11.

You will learn to:

  • Define the five growth options as they apply to your company
  • Understand why external growth (acquisitions, joint ventures, etc.) can be the best option for your company
  • Gauge the current state of the M&A market using relevant statistics and indicators
  • Begin to develop a step-by-step M&A process for your company

Don’t let opportunities pass you by. Learn how to best position your company for success by joining us for this foundational webinar.

Date:  Thursday, December 11, 2014
Time:  1:00 PM ET
CPE Credit available.

Register: http://attendee.gotowebinar.com/register/3419240731938664450