Acquisitive Growth – Workshop 4 (Targeted Offerings)
The Appleton Greene Corporate Training Program (CTP) for Acquisitive Growth is provided by Mr. Chicles Certified Learning Provider (CLP). Program Specifications: Monthly cost USD$2,500.00; Monthly Workshops 6 hours; Monthly Support 4 hours; Program Duration 24 months; Program orders subject to ongoing availability.
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Learning Provider Profile
Mr Chicles is an approved Certified Learning Provider (CLP) at Appleton Greene who is a business leader and strategist with broad experience in the global multi-industrial, aerospace and defense sectors. He is a seasoned operational leader of global industrial businesses, leading transformational strategies in highly competitive markets.
As a senior, C-suite strategist for multiple major industrial corporations he has led multiple mergers, acquisitions, divestitures and restructurings, as well as corporate break-ups and spin-offs. He has a distinguished track record of successful transformations of complex organizations in dynamic and uncertain market conditions while engendering the trust and buy-in of employees, customers, vendors, owners, corporate leadership and boards of directors.
A highly engaged leader at the personal and team level he has demonstrated the ability to engender effective senior teams and boards. He’s also an active mentor, teacher and community leader.
Mr Chicles is an active board member with AES Seals, global leader in sustainable reliability engineering, and Micro Technologies Inc, an electronics and advanced manufacturing company. He is a principal partner with ProOrbis Enterprises®, a management science consultancy with premier clients such as the US Navy and PwC, as well as the principal of Xiphos Associates™, a management and M&A advisory. Recently, he served as Board Director and Chairman of Global Business Development with Hydro Inc. the largest independent pump and flow systems engineering services provider in the world.
He was President of ITT’s Industrial Process / Goulds Pumps business segment a global manufacturer of industrial pumps, valves, monitoring and control systems, and aftermarket services for numerous industries with $1.2 billion in revenue, 3,500 employees and 34 facilities in 17 countries. Preceding this role he served as Executive Vice President of ITT Corporation overseeing the creation of a newly conceived ITT Inc. following the break-up of the former ITT Corporation to establish its strategy and corporate functions such as HR, communications, IT and M&A, building the capabilities, policies and organizations for each.
He joined ITT Corporation’s executive committee as its strategy chief in 2006 and instituted disciplined strategic planning processes and developed robust acquisition pipelines to respond to rapidly changing markets. Created successful spin-offs of 2 new public corporations Exelis Inc. and Xylem Inc. ITT Corporation was named one of “America’s Most Respected Corporations” by Forbes for exemplary management and performance during his tenure there.
Before joining ITT, Mr Chicles served as Vice President of Corporate Business Development and head of mergers and acquisitions for American Standard / Trane Companies, where he initiated and closed numerous transactions and equity restructurings globally.
Additionally, he created and led the corporate real estate function which entailed more than 275 real estate transactions around the world.
He began his career at Owens Corning rising through the ranks in various operational roles to Vice President of Corporate Development.
Recently, he taught advanced enterprise strategy at Stevens Institute of Technology as an adjunct professor and still supports start-ups through the Stevens Venture Center. He continues to be active as the Founding Board Member with several successful start-up technology businesses and non-profit organizations. A community leader, Mr Chicles has held the role of President of the Greek Orthodox Cathedral in Tenafly, N.J., He also led trips abroad to Cambodia and Costa Rica to build sustainable clean-water solutions and affordable housing.
His formal education includes earning a Masters of Business Administration from The Wharton School at the University of Pennsylvania, and a Bachelors in Finance from Miami University.
MOST Analysis
Mission Statement
Everything the market offers, be it products or services or any experience, is known as a market offering. Market offerings are also divided among themselves based on the nature of the offering. Read along to understand the role and value of market offerings. Individuals within a market have different wants and needs. As a result, businesses in the market offer various products and services. The ultimate aim of businesses is to fulfill all the varying wants and needs of the population. Providing better target offerings and standing out in the market will eventually lead to more loyal customers and a broader customer base. People expect businesses to add value to their lives in various ways, precisely the purpose of market offerings – satisfying customer needs.
Objectives
01. Product Offerings: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
02. Service Offerings: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
03. Talent & Human Capital: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
04. Transferable Capabilities: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
05. Channels to Market: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
06. Brand Platform: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
07. Scope Vs Scale: departmental SWOT analysis; strategy research & development. 1 Month
08. Map the ‘Gaps’: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
09. Target Communication: departmental SWOT analysis; strategy research & development. Time Allocated: 1 Month
Strategies
01. Product Offerings: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
02. Service Offerings: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
03. Talent & Human Capital: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
04. Transferable Capabilities: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
05. Channels to Market: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
06. Brand Platform: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
07. Scope Vs Scale: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
08. Map the ‘Gaps’: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
09. Target Communication: Each individual department head to undertake departmental SWOT analysis; strategy research & development.
Tasks
01. Create a task on your calendar, to be completed within the next month, to analyze Product Offerings.
02. Create a task on your calendar, to be completed within the next month, to analyze Service Offerings.
03. Create a task on your calendar, to be completed within the next month, to analyze Talent & Human Capital.
04. Create a task on your calendar, to be completed within the next month, to analyze Transferable Capabilities.
05. Create a task on your calendar, to be completed within the next month, to analyze Channels to Market.
06. Create a task on your calendar, to be completed within the next month, to analyze Brand Platform.
07. Create a task on your calendar, to be completed within the next month, to analyze Scope Vs Scale.
08. Create a task on your calendar, to be completed within the next month, to analyze Map the ‘Gaps’.
09. Create a task on your calendar, to be completed within the next month, to analyze Target Communication.
Introduction
When you run a business, it’s critical to focus on attracting prospective clients who genuinely want your goods and services. Finding the right customers can have a huge impact on your company’s success and can eventually increase your revenue. In the introduction to this workshop, we define a target market, discuss why doing so is important, and provide you instructions on how to locate your own target market.
Why is it important to identify your target market?
When your company is expanding through acquisitions, knowing your target market will help you make more effective business decisions. In essence, it creates a mechanism for you to expand your clientele that is efficient, sustainable, and successful. Additional justifications for identifying your target market include the following:
Strategic marketing plans
By determining your target market, you may use a variety of sales and marketing strategies to appeal to a certain demographic. For instance, you can develop a marketing strategy that is more successful the better you understand your audience. A smart marketing strategy considers the most effective channels for interacting with your target market and selects the marketing messages that will be most effective.
Important business decisions
Making strategic decisions about product distribution, product prices, and overall promotion efforts can be aided by identifying your target market and creating a marketing plan. This can save your company money and effort on pointless spending.
Product development and adjustments
You may make items and services that better suit your target market’s interests and wants by understanding its unique needs. Knowing who your target market is can also help you strategically change your present product lineup to appeal to a wider range of customers.
Greater revenue
Knowing your target market will enable you to attract more customers who are really interested in the goods and services you are selling. Knowing your target market, for instance, ensures that you are reaching people who can increase your revenue rather than casting a wide net and focusing on a group of people with disparate interests.
Outperforming competitors
By determining your target market, you can avoid taking a shot at new clients and customers without knowing their interests and letting your competitors increase their revenue. Possessing a competitive advantage can increase your chances of success in your sector as a whole.
How Lush Out-performs it’s competitors
Top Competition: Sephora, BOMB Cosmetics, Etsy.
There is nothing else like Lush in the market for cosmetics. This cosmetics company has a global presence and a “warm and fuzzy” regional strategy that isn’t hesitant to test the limits.
What distinguishes LUSH from stores like Sephora or even Etsy, for example? items produced by hand. Supporters of LUSH are passionate about ethical shopping and are enamored with the purity of handcrafted goods. The key to the company’s success is the realization that its core customers prioritize social and corporate responsibility over an opulent and exclusive image.
The branding for LUSH is straightforward and sincere, with striking visual contrast that is absolutely unheard of elsewhere. Because of this, the business enjoys a sizable fan base of brand loyal customers.
How they’re doing it:
• Understands its customers — appeals to the girl who’s “had enough” and believes in what they believe
• Selfless with its products — offers free samples and in-store trials on nearly everything
• Not selling an image—the business is selling a viewpoint on how to define “beauty”
• Offers a one-of-a-kind retail experience like you’re walking into an Etsy store in real life
How to identify your target market
Remember that just because you’re targeting a certain market doesn’t mean you have to exclude some customers from your goods and services. Instead, it enables you to concentrate your efforts on those who are more inclined to do business with you. When determining your target market, follow these steps:
1. Identify your existing customers
Think about your current client base and the customer base of your target firm before deciding on your target market. Think about their traits and passions and search for connections. Most likely, individuals with similar traits and interests could gain from your goods and services as well. Finding the current clients who provide you the most revenue is very crucial. You are now more prepared to specify your target market.
2. Research your competition
You can more effectively pinpoint your target market by researching your competitors. Find out who they are now targeting and who they are targeting in the future. Focus on any specialized markets they might have missed and direct your efforts toward other areas.
3. Analyze your offerings
Make a list of your present offerings, including their distinctive qualities. List the precise advantages they offer after that. A clothing store might, for instance, sell winter apparel to help potential clients who want to stay warm in the chilly months. Because they can already observe how the store’s products are assisting others with similar needs, keeping them warm and meeting their demand may draw in additional consumers. As a result, the clothes store is bringing in more customers and earning more money.
Make a list of the people who could profit from your offers once you’ve listed the advantages your goods and services offer. Basically, make a list of the people whose needs your goods and services can satisfy. Using the clothes store as an example, it might decide to target people who need winter shoes to finish their outfit.
4. Segment your larger market
Once you’ve identified your target market as a whole, focus on segments by taking into account key demographic criteria like age, geography, marital status, income, and gender. You can determine which demographics are more likely to purchase your goods or services by doing this.
You can also take into account their personalities, lives, and particular interests or pastimes. Consider, for instance, how they will utilize your goods and services and what aspects they could find most alluring.
5. Re-assess your target market
Assess your decision-making procedure after determining your target market. If your target audience would actually benefit from your products and services, if they can afford them, and whether you included enough people who met your criteria should all be taken into account. Determining whether you comprehend your target audience and its own decision-making process is also crucial. Consider customizing your marketing messages if you have more than one target market.
Marketers Should Drive M&A Success: Here’s Why
According to McKinsey, the year 2021 saw a booming market for international mergers and acquisitions, with significant deal values reaching a high of $5.9 trillion. But ineffective execution continues to frequently threaten the effectiveness of acquisition tactics. 53% of acquirers underperformed their industry counterparts, according to a PwC analysis.
I think that the absence of up-front marketing participation is a significant contributor to the issue.
People frequently believe that success in mergers and acquisitions (M&A) is driven by sales, HR, and finance. However, alarming research by McKinsey revealed that in 50% of situations, pre-closing marketing was not heavily involved. Integration and deal success are critically dependent on the marketing department.
Marketing should be at the forefront of M&A strategy rather than being treated as an afterthought. As their expertise touches every aspect of deal strategy and execution, mergers can also be among the most rewarding tasks for marketers.
Why The Marketing Role Is So Important
Making sure clients understand how the new firm will benefit them in the long run is a crucial but frequently disregarded success component in any merger. According to a 2021 study, consumer satisfaction fell as a result of M&As more than any additional value from efficiencies.
Customers frequently express displeasure because executives frequently focus on financial and operational concerns rather than marketing leadership and customers.
Companies that are merging also frequently overlook how crucial consumer impression is to the purchase. In order to improve that perception during integration, marketing plays a critical role in preparing customers and creating the new company’s brand.
Avoiding A Branding Frankenstein
It can be difficult to determine how much one brand is worth in comparison to another during a merger and which industry segments a company should concentrate its rebranding efforts on. Marketing must focus on branding both during and after a deal because it is one of the early signs of a merged company’s direction.
Despite their importance, brand decisions are frequently hurried or influenced by political and emotional issues, claims Deloitte. A rebrand that is badly thought out or carried out can produce a “Frankenstein” that weakens the influence of the original brands.
However, marketing executives can rapidly see product upgrades made possible by the acquired company’s marketing expertise and intellectual property—a significant potential advantage of any purchase. For the sake of reassuring clients and other stakeholders, marketing should also immediately convey information regarding the new company’s growth story.
The value proposition must be made clear before the contract is finalized, and it should serve as the foundation for all plans and strategies. To design the new brand strategy with appealing, original value propositions, marketing leaders should collaborate with the CEO and the business. In order to maximize the development potential of the merger, they should then take the lead in delivering these propositions and their stories while integrating the brands.
Spending too much time on important organizational and brand decisions might impede future growth, so making these choices quickly and thoughtfully is essential.
Evidence-Based Impact
Strategic and tactical brand execution are just two examples of the broad integration function that marketing plays. Consider the crucial duty of reviewing product and service communications to guarantee a smooth and consistent client experience following the merger.
The sales and marketing departments should lead cross-functional pricing improvement initiatives.
During integration, other executives frequently fail to recognize the significance of pricing management. I’ve discovered that pricing initiatives are typically one of the most successful at revealing return on investment as well as the revenue impact and transaction value, so this can be an expensive omission.
Within the first 12 months of a merger, which is when analysts normally anticipate to see results, companies often enjoy pricing gains. Companies that are merging shouldn’t disregard this possible source of wealth.
By concentrating on actions that increase cross-selling and upselling prospects, sales and marketing can also contribute to the creation of revenue synergies, according to Bain. They can also direct marketing funds to outlets with strong returns.
Chief marketing officers (CMOs) should collaborate with CEOs to comprehend and address marketing factors in order to maximize the impact of these integration efforts. These elements have been succinctly encapsulated by McKinsey in its six “Ss,” which many M&A professionals have found useful. Here are the six “Ss”:
“• Story. Define the new organization’s value proposition
• Segments. Refresh your view of the market
• Service. Delight your most valuable customers
• Share. Deliver consistent value over time
• Science. Take an objective, fact-based approach to setting brand strategy
• Scope. Tackle less, not more, on and after Day 1.”
McKinsey said these factors can as much as double marketing integration success as measured by revenue synergies captured. Applying them before integration can maximize impact and embed the value of marketing in the deal.
Involvement in M&As is a vibrant and exciting part of marketers’ roles. But it is a complex area. The more evidence-based impact they can demonstrate, the better. This evidence can give the board confidence and help them realize the importance of involving marketing leaders at the highest level before and after the deal.
Difference Between Market Segmentation and Target Market
If you target everyone, you’ll reach no one.
Market segmentation refers to the identification of particular consumer groups for the product, whereas target market refers to the potential clients for the specific product or service. This is the main distinction between market segmentation and target market.
Target market identification and market segmentation are crucial elements in the marketing process. Despite the fact that the processes are identical, market segmentation should always be done before choosing the target market.
What is a Targeting Strategy?
Although “targeting” and “segmentation” are two different ideas, they are frequently used synonymously in business. Consider them as an analogy for two different types of archery to help you comprehend the differences between the two.
You have only one clear objective in mind when you shoot an arrow at a target: striking the bullseye. In contrast, you aim to hit as many targets as you can when you shot arrows at a collection of targets.
This is the distinction between segmentation and targeting. When you target, you concentrate your marketing efforts on a particular demographic that you believe is most likely to purchase your good or service. When you segment your market, you create groups based on factors like age, gender, income level, etc.
Recap: What is Market Segmentation?
The process of segmenting a market of potential customers into groups or segments based on various qualities is known as market segmentation. When a business decides to target a certain consumer group with its goods or services, market segmentation is required.
Based on variables like age, income level, or behavior, we divide the consumer base into manageable categories in the process of market segmentation. These divisions are subsequently utilized to market and optimize items.
Market segmentation forms subgroups of a market based on the following factors.
• Demographics
• Needs
• Priorities
• Common interests
• Personal traits
Moreover, the above factors help us to understand the target audience.
What is Target Market?
A target market is a group of potential clients to whom a company needs to market its goods or services. A portion of the overall market is the target market. Target market consumers share comparable qualities including purchasing power, demography, and income levels.
A fundamental step in the marketing process, target market identification is crucial to developing a marketing strategy. The company would be wasting time and money by skipping this stage.
Companies must identify the target market for their product in order to know who the product will appeal to and who will buy it the most. After a business assesses all potential market segments and determines which would be the most profitable to the business after a merger or acquisition, a target market is typically identified.
Usually, the target market is studied before a new product is introduced. In other words, during the testing stage, organizations need to determine their target market. After a product is released, a corporation must track sales, conduct customer surveys, and engage in a variety of other activities to understand the target market’s demands.
What is the Relationship Between Market Segmentation and Target Market?
Major ideas in a marketing plan include target market and market segmentation. It also forms the basis of a marketing plan. They have a connection to one another. Only after successfully identifying market segmentation is there a need to identify the target market. Before doing market segmentation and choosing a target market, it is nearly difficult to advertise a product.
What is the Difference Between Market Segmentation and Target Market?
Market segmentation occurs when a business decides to define a certain consumer type for its good or service, whereas target market identification occurs when the business determines which customers have the means to purchase the good. So, the main distinction between the target market and market segmentation is this.
In order to segment a market, it is necessary to conduct a comprehensive market analysis and break consumers into groups based on shared traits. Target marketing, in contrast, focuses on the best consumer segment for the product being sold. Market segmentation is also influenced by factors including behavior, demographics (such as gender, age, education, and income), geography, and psychographic characteristics, or inclinations toward certain lifestyles and personalities. Target markets might, however, share some traits. As a result, we might view this as yet another distinction between the target market and market segmentation.
Here are some key differences between these two concepts:
Scope: In order to divide a market into multiple groups, market segmentation often concentrates on the entire market. You may choose a number of target markets to concentrate on in your campaigns once the market segmentation process is complete.
Goals: Learning more about the total consumer population is the aim of market segmentation. You can change your purpose to concentrate on selling goods and services to these markets once you’ve determined your target markets.
Function: Functionally, market segmentation is a process and your target market results from that process. You might use the information you gain from market segmentation in other processes that relate to your target audience.
How do market segmentation and target markets work together?
These two ideas may be used in the segmentation, targeting, and positioning, or STP, process by marketing and business development teams. STP operates as follows:
Segmentation: This is the process of examining the market to identify the common traits that consumers share. Doing so enables you to comprehend the goods and services each group may find valuable. You can choose which group or groups are best appropriate for your marketing initiatives by creating segments.
Targeting: Targeting is the process of researching each segment’s behaviors and choosing those that, in your opinion, make the most sense for the good or service you’re trying to market. Marketing teams typically choose one or two categories to concentrate on at once.
Positioning: By understanding your target market, you may place your brand, goods, and services where they’re most likely to find them, for as through TV commercials, social media campaigns, or establishments where your target markets frequently shop.
Summary – Market Segmentation vs Target Market
Target market identification and market segmentation are crucial elements in the marketing process. Market segmentation refers to the process of identifying a specific consumer group, whereas target market refers to the potential consumers for a given good or service. This is the main distinction between market segmentation and target market.
JetBlue’s Target Market
The low-cost traveler looking for a convenient yet economical flight fits the JetBlue buyer persona. They are often a younger demographic that prefers to interact with brands on social media and demands prompt replies from them. The platform they choose (in this case, Twitter), the language they use (flying like a “boss”), and even the Twitter handle (@JetBlueCheeps) all reveal their target market.
JetBlue doesn’t just rely on social media to reach their audience, either. They’re leveraging email marketing to keep those “like a boss” campaign multi-channel!
Executive Summary
Chapter 1: Product Offerings
What is a product offering? Product offerings serve as an important building block to both customer engagement and knowledge of your value proposition.
A crucial element of marketing is the availability of products. Understanding the differences between goods, products, and service products is crucial since each requires a different marketing strategy to succeed.
Sometimes people buy things because they want them rather than because they need them. The main features of product offerings are discussed in this course manual along with their significance.
What Is a Product Offering?
Any offer of goods, services, or information is a product. A product offering is an example of what might be offered for sale to customers. It is created in conformity with the product specifications, features, and values.
Because they can be basic or sophisticated and have a variety of characteristics, product offerings are distinctive and different from one another. To share a person’s specific interest with them so they can gain from the trade is the goal of an offering.
Why Are Product Offerings Important?
Every company needs to offer a variety of products in order to maintain a growing customer base. As a result, you’ll continually attract new clients and have the opportunity to make money.
A product offering also gives you immediate market visibility because to how simple it is to build a scalable inventory. A excellent landing page can be distinguished from an average one by the products it offers.
By offering the visitor a bigger, more appealing value in exchange for their information, a strong landing page sets itself apart from the competitors.
You should offer visitors the greatest product options rather than letting them sign up for your competitors’ services. You will see the outcome in the highest conversion rates as a result.
Component of Offerings: Product, Price, & Service
When you concentrate on providing what you want to sell and become recognized for, your web marketing strategy will be most successful. This pertains to your company’s goods, costs, and services.
Offerings are goods or services that satisfy customers’ needs, wants, or occasionally both. Let’s examine how marketing develops and offers products to satisfy such expectations.
Products:
Because they are the physical item that a client interacts with during the transaction process, products are an essential part of the marketing process. It’s critical to understand the things that a firm produces and the size of its prospective market.
A benefit occurs when a feature of a product satisfies a need or desire. Consumers place varied values on features depending on their needs.
Price:
Another essential element of an offering is the price, or the amount customers pay to receive its benefits. The cost of the goods may be paid in installments over time or in one lump sum.
Consumers frequently believe that they simply paid for the cost of the item. The amount of money spent on a product’s purchase, use, and eventual disposal is known as the total cost of ownership (TCO).
Service:
A service is typically defined as one or more actions that deliver measurable advantages. Their objective is to assist a customer in achieving a specific outcome that they specify. Facelifts are a service.
Your paid-for facial cannot be stored, transferred to another person, or sold. Services that are advertised as “pure” services are free of any discernible features.
The majority of the time, consumers must participate in the services in person. A doctor’s appointment, therapy session, and haircut all call for the client to be there. Additionally, the creation of the service and its use are mutually exclusive.
Wrapping Up Chapter 1
What is a product offering? — A fascinating product offering could be a smart answer if you struggle to persuade a potential consumer to make a purchase.
Three unique components make up a product offering: a product, a price, and a service. The customer receives something they value from the goods. It can be something that makes their lives simpler, makes them happier, or makes their health better.
Chapter 2: Service Offerings
In the previous course manual, we discussed the differences between service offerings and product offerings. In this course manual, however, we will be discussing service levels and packages and consider the different business models. Service levels or packages are common, such as Premium, Standard and Basic which entail different offerings and activities each with different price points. For example, a premium service might be for an industrial pump manufacturer to design and bundle a whole flow control system which incorporates and integrates the pumps, valves, controls, pipes, etc. into a completed system with customized training and support that can be used to “plug and play” into a customers operation. Conversely, a “Basic” service package might be focused on just the pump supplied, spare parts and basic technical information that the customer then combines with other products themselves.
Additionally, are the services offered in-house or do they require other 3rd parties to be engaged. Often, the services offered are directly tied to a product offering however some business offer only services as their offering. In these cases, the step to assess and determine offerings would be similar to the steps covered in the previous course manual.
The range of customer support that a company offers is referred to as its services offerings. To simplify the marketing and sales process, a business might package and present its service offerings to customers, giving them the option to select which services to employ to meet certain needs. You might gain from understanding everything there is to know about this critical market issue if you work in product creation, finance, business, or any other sector that offers services. Next, we define services offers, give instances of this concept, and provide advice on how to make all services offerings for a firm as effective as possible.
Recap: what are services offerings?
Services offerings are a group of specific people, procedures, data, resources, equipment, and other things that benefit customers. This idea relates to the organized skills that a business may possess and provide to customers. Enterprise capability, IT capability, and process capability are all concepts connected to service offerings. The majority of B2B companies that offer network, business, and digital services typically use this kind of package.
Customers receive real value from an organization’s offerings, which help them achieve their objectives and facilitate outcomes. The numerous service alternatives with varying availability, scope, cost, and packaging options are outlined in a service offers catalogue. Customers can select different features, performance levels, and other service offers components to suit their own demands.
Here are some primary components of service offerings:
• Needs: This is the need that a service fulfills or a problem the service solves.
• Requirements: These are the standards and regulations for performing the service successfully.
• Catalog: This is the list of various related services necessary for the complete offering.
• Solution: This is the solution that the service applies to the situation.
• Abilities: These are the capabilities of all people, equipment and technology involved in the service operation.
• Management: This is the way the service accomplishes goals, serves the business mission and supports the company.
Chapter 3: Talent & Human Capital
Talent/human capital is a distinct category of offerings to be considered. As evidenced by the scarcity of talent and workers in virtually all industry and economic sectors, the access to and retention of human capital has emerged as one of the most critical aspects of successful acquisitive growth.
Assessing the relative human capital profiles between acquiror and target to determine what each brings to the potential combined organization can be an important determinant of success with an acquisitive growth program.
Again, while there might be overlap when considering this offering along with services and capabilities, the importance of the “people side” warrants this as a separate category of offerings.
To illustrate, while a capability is defined as the interrelatedness and interaction between people, processes and technology, when there’s a strategic intent to develop a certain business or high levels of performance, the specific element missing might be the people alone.
A recent personal example comes to mind where we were looking to acquire businesses in a water treatment market segment where we had presence already established and proven technology and processes.
We had the technology, processes and the engineers who developed them however we lacked people with application knowhow (think technicians, lab personnel, field technical support reps, etc.) and customer relationships.
Therefore, when determining our targeted offerings we knew what we brought to the table and what we were looking for in an acquisition target, which was less about the business itself and more about the people they had, their aptitude, the culture and compatibility with ours, etc. – in other words, we were looking for people not businesses per se.
By knowing this, it enabled us to focus our efforts effectively and to present a unique value proposition to the target companies which resulted in two very successful acquisitions and integrations.
What Is Human Capital?
Culture and talent. Employees. These are frequently the words connected to the M&A human element. But what about experience, knowledge, and skills? phrases based on data that describe how well-equipped the staff is to carry out the company’s goal.
The phrase “the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country” is used to define human capital in official documents.
This definition states that the abilities, expertise, and experience of your workforce have a specific, monetary value. The company’s entire worth must take into account this “human capital” value.
Chapter 4: Transferable Capabilities
The capabilities provided by the targets and acquirers fall under a different but relevant category from the products and services. The fusion and interaction of people, processes, technologies, and assets are referred to as capabilities. For instance, a company’s capacity to provide exceptional customer service would depend on the people it hires, the training it provides, the resources it provides, and the procedures it employs.
Although some goods and services could seem to be capabilities in and of themselves, it’s crucial to comprehend the whole range of goods and services offered and desired. Offerings that don’t transcend beyond these specific components would certainly be missed if they are only defined as products or services. To give an example, consider how important “on time delivery” is to many clients. In this situation, a product and a related service package might be provided, but regardless of their qualities and features, they might not be regularly delivered within the anticipated lead times, making the entire package undesirable.
Which combination of people, resources, procedures, etc., work together to produce short, dependable lead times is the question at hand?
Company capabilities, also known as enterprise business capabilities, are what a firm can and does. They are an abstraction that encapsulates end-to-end operations and is independent of the underlying procedure and supporting technology. The components that make up an enterprise and are essential for operationalizing the strategic objective and achieving business results are the competencies of a corporation.
The capacities of every company vary. Not every business requires or possesses all competencies. Some of the factors that affect and form the competencies a company needs include the industry, geography, customer groups, product/service kinds, and competitive dynamics. For instance, in order to compete with the e-commerce behemoths, businesses today are in desperate need of omnichannel capabilities. On the other hand, digital capabilities that improve the supply chain—the procure to pay value chain—are tremendously useful for a B2B (Business to Business) organisation, even though online commerce may have a lower role.
Let’s clarify different concepts:
Company Business Capabilities: A capability is essentially an explanation of what a corporation does, as opposed to how it does it. (Capabilities and business architecture are defined here.)
Business Process: A business process is a comprehensive description of the actions taken by different players and the flows involved in carrying out a business function.
Value Streams: Value Streams are high-level stakeholder-oriented flows that reflect an outcome and are one step beyond comprehensive process maps.
The enterprise business architecture includes each of the aforementioned elements in full.
Soft or hard capabilities are both available to a company:
Soft Capabilities Examples:
• Leadership
• Innovation and Transformation
• Culture and Change Management
Hard Capabilities Examples:
• Distribution
• Manufacturing
• Product Design and Development
Strategic, core, contextual, and foundational business capabilities are the several categories that make up an organization’s capabilities. This segmentation, which helps determine the level of executive focus and the quantity of resources allocated, among other things, is based on the relative importance and value of the competencies.
Chapter 5: Channels to Market
Taking a successful company with tried-and-true business practices to new markets is frequently one of the main goals of acquisitive growth.
The way to reach customers in any given market is a function of it’s channels – distribution, direct sales, remote selling, 3rd party firms, etc. Indeed, it’s not uncommon for competitors who have very strong offerings and capabilities to be effectively blocked from markets due to channel barriers to entry.
In certain segments all sales go through a set of established distributors who through some combination of access, bundling, or other capabilities have erected tall barriers to new suppliers, players. Therefore, at this stage among the more important determinants of targeted offerings is the channel to market.
An acquiror or target might respectfully bring unique channels to market or distinct lack thereof, so understanding these is critical when pulling together the post-acquisition integration and business plans.
Not all channels are alike so doing the analysis to understand specifically what’s needed is important.
Marketing Channels
In order to increase the availability and accessibility of goods and services to certain markets, marketing channel intermediaries are necessary. Distribution and marketing networks are essential because they help us find the goods and services we frantically need.
Thus, the question of why companies employ distribution channels arises.
The product might be at the right place at the right time for the consumer to buy it thanks to a company’s distribution policies.
Distribution channels are essential in this context because they encompass the procedures used by businesses to get their goods from the producer to the final consumer.
The following are examples of marketing channels:
• Manufacturers sell directly (D2C): to clients via direct selling, which is primarily used by internet businesses
• Selling through intermediaries (B2B): entails distributing products to customers via wholesalers and retailers
• Dual distribution (B2B and B2C): means that products are delivered to customers through more than one marketing channel
• Reverse channels: run from the consumer to an intermediary and subsequently to the beneficiary; they are the polar opposite of the others.
Chapter 6: Brand Platform
In many cases, the strategic play is to flow new products through an established brand or vice versa to acquire a brand through which to sell one’s offerings.
A brand is an offering in the sense that, when combined with a product or services provides the customer with the experience or emotional connection they seek. It’s part of the what’s being offered. Therefore, as part of the development of targeted offerings consideration must be given to what each party brings to the table in this regard and the relative impact on value, business plans, etc.
The importance of a Brand
Some business owners underestimate the value of a brand. They believe they cannot be labeled a “brand” because they do not provide a distinctive, ground-breaking product.
However, any business, from Coca-Cola and Nike to Wholefoods and Tesco, can be considered a brand. To put this in context, the majority of the things offered by Wholefoods and Tesco are sourced from other companies and brands, yet the two supermarkets remain brands in their own right.
With a professionally established brand foundation behind it, your firm may be its own brand as well.
What is a Brand Platform?
A Brand Platform, according to SendPulse, is a marketing concept developed to identify the distinguishing aspects of a brand both ideologically and visually. It is critical to create a holistic image of the company and deliver a distinctive service to the target audience. The Brand Platform is frequently seen as ageless because it derives its form from the brand’s identity and serves as the brand’s continual base. While the Big Idea for brand communication can shift as the competitive landscape and target audiences shift, the Brand Platform remains constant.
A clear and compelling Brand Platform is frequently the foundation of coherent brand communication. With Brand Platforms, we can combine all aspects of a brand’s identity, such as its history, vision, values, positioning, promise, visual identity, tone, and more.
When Perception Becomes Reality: Brand Value In Mergers And Acquisitions
Regardless of which side of a transaction you are on, experience and facts demonstrate that a well-executed brand provides monetary value and aids in the unification of merged/acquired companies. Before, during, and after merger and acquisition (M&A) activity, your brand can and should play a vital role. Here’s how it’s done:
Pre-M&A
Whether you are buying, selling, or merging, a relevant, real, and effective current brand strengthens your position and increases the value you bring to the table. Doubtful about that assertion? Consider that when Amazon bought Whole Foods in 2017, approximately 70% of the acquisition price was allegedly “allocated to goodwill.”
To be clear, brand and goodwill are not synonymous, but enhancing brand value frequently leads to long-term success, and goodwill allows you to measure that intangible value.
So, evaluate your brand objectively. Is your brand out of date and stale? As an example, consider the process of selling your home. What do the majority of us do? We tidy it up and repair it so that its true potential and value can shine through. The same procedure applies to your business.
We frequently hear business leaders refer to their company as “the best-kept secret” in their industry. What they truly mean is that their brand isn’t telling their company’s narrative well. An authentic brand does not invent things; rather, it identifies and articulates the authentic value it provides to clients in a relevant, genuine, and effective manner. Even if your brand isn’t as strong as it may be, it’s not too late to improve. Improve your brand — but don’t put it off too long.
Mid-M&A
When you are in the midst of an M&A transaction, having a strong brand is advantageous. Strong brands give both organizations a clear idea of who is on the other side of the table, delivering insights into company culture and personality. A well-articulated brand communicates the company’s value proposition clearly, making it easier to identify strengths, shortcomings, places where organizations complement one another, and areas where they overlap. This additional information aids in discussions as you move through the M&A process.
Post-M&A
The early exhilaration usually gives way to the somber prospect of integration once the deal is done. Effective branding promotes unity by uniting leadership and holding them accountable to the brand’s ideals.
“Brand is the most powerful, but often overlooked, tool for solving many of the common problems in a merger,” according to consultancy firm Lippincott. Leaders who recognize its full potential, well beyond its name and emblem, have a major advantage in unifying enterprises and cultures… “The North Star is the brand — the focal point for closing cultural gaps and setting the integration agenda.”
Given the capacity of brands to aid in this process, define how the brands will coexist (or not) as soon as practicable. Will one of the partners be covered by an existing company brand, or will the brands need to be tweaked and merged into a single new brand? In any instance, act fast to secure an accurate and consistent brand, and then drive this through the business to ensure the appropriate level of integration. If your expansion plans include other acquisitions, review your performance and then revise and keep your plan ready for your next transaction.
Most of us would agree that effective brands assist our businesses in marketing and selling their services or products, but that is not all they accomplish. Company brands provide significant value, particularly in mergers and acquisitions. Brands play an important role in mergers and acquisitions, whether it is generating monetary valuation, negotiating position, giving insights that assist alignment, unifying culture, or facilitating integration. The stakes are too great to wait, whether you think you’ll be in the M&A game soon or not. Get your brand in order!
Chapter 7: Scope Vs Scale
Most products and services follow the natural product development life cycle or “S-Curve” of development, introduction, scaleup, optimization and decline. Therefore, depending on various considerations such as supply volumes, unit costs/prices, quality at various volume levels, etcetera, a critical variable to success is to obtain the ability to produce products at scale to meet customers’ demands.
Such scale manufacturing is usually capital intensive and fraught with barriers to build new facilities, therefore this becomes a key criteria or targeted offering that either an acquirer offers to or obtains from a target.
Economies of scale are a typical explanation or argument for takeovers and mergers. They refer to the reduction in unit costs that can occur when the scale of a firm’s operation increases. The approach is strongly related to the “cost leadership” strategy. Economies of scale are especially essential in industries or marketplaces with substantial fixed costs. If a corporation can dramatically grow its combined scale of operation by a takeover or merger, those fixed expenses can be dispersed across a bigger output. Mega-mergers in industries such as pharmaceuticals (e.g., the Astra/Zeneca or GlaxoSmithKline mergers) and airline operations (e.g., the British Airways/Iberia merger) are notable instances of corporations seeking economies of scale through M&A.
Different economies of scale include:
• Technical economies; if the firm has significant fixed costs then the new larger firm would have lower average costs,
• Bulk buying – A bigger firm can get a discount for buying large quantities of raw materials
• Financial – better rate of interest for large company
• Organizational – one head office rather than two is more efficient
A merger can allow a company to grow in size while benefiting from several of these characteristics.
It should be noted that a vertical merger has less potential economies of scale than a horizontal merger; for example, a vertical merger cannot benefit from technical economies of scale. However, there may still be financial and risk-bearing economies in a vertical merger.
Some industries will benefit from economies of scale more than others. A car factory, for example, has large fixed costs and hence benefits from greater economies of scale than two apparel merchants.
Chapter 8: Map the ‘Gaps’
Acquisitions and mergers can be a powerful growth strategy. However, implementation challenges and the allure of right away cost synergies frequently trump developing, identifying, and monitoring revenue metrics and growth initiatives. Goals for cost cutting may even collide with chances for income expansion. In this course manual, we outline a list of criteria that, when applied to mapping the gaps during the M&A target offerings process, might result in improved results.
A business considering a merger or acquisition frequently expresses great optimism that the transaction will be a growth engine. It seems sense that the goal is to grow the company to new heights with the resulting combination of products, people, and pipelines.
Reality then sets in. The combined company must deal with having a presence in several markets, having a larger and more diverse client base, having a more complicated portfolio of products and services, and having a high degree of operational and human complexity. Cost synergies are prioritized over the arduous task of developing, identifying, and monitoring revenue KPIs and growth initiatives because they are a concrete and frequently immediately attainable goal. Goals for cost cutting may even collide with chances for income expansion.
Therefore, it should come as no surprise that the majority of M&A transactions intended specifically to enable growth fail to accomplish their stated growth objective. While M&A can be a path to growth, it is only the first of many choices that will influence the deal’s outcome. What can acquisition-focused companies do to improve their chances of success, especially those pursuing purchases with strategic expansion as a goal?
According to Deloitte’s research, some behaviors—or lack thereof—seemed to have contributed to the success or failure of “growing the business.” To support the conclusions, they evaluated such actions and results. Additional research showed that:
• They categorized 27% of the transactions as high-performing growth transactions. These buyers were consistently able to outpace industry growth and develop the merged businesses faster than the separate businesses would have without the acquisition.
• 45% of the agreements had medium-performing growth. Although inconsistently and more slowly than their pre-deal growth or the industry growth rate, they were able to expand their business.
• 28% of the deals had low growth performance, consistently producing flat or declining revenues compared to pre-deal revenues and relative to the rate of industry growth.
The acquirers connected to the high-performing deals expanded quicker than they would have had those acquisitions not taken place. Based on historical and predicted compound annual growth rates (CAGR) and after taking into account revenue-impacting internal or industry developments within the three years after the deal completion, these companies produced actual revenues that were higher than what was anticipated three years after the deal closed.
Source: Deloitte analysis
Chapter 9: Target Communication
External and internal communication strategy
Aligning internal and external communications is essential, and getting the best performance out of your teams from the beginning to the end will be key. Other considerations include the following:
• Being organized and quick to respond to outside influences
• Aligning internal and external communications with the merger roadmap is necessary.
• Keeping the business in mind and prioritizing your staff
• maintaining a focus on corporate success, assisting in the management of uncertainty, and preparing employees for the future
• Setting up an internal communications infrastructure and capacity that, in collaboration with HR, collects regular, detailed insights into sentiment and minimizes risk and disruption
• implementing internal communication tools and materials that efficiently serve both internal and external company communications
• assisting and preparing leaders to lead constructively in the face of uncertainty and to produce exceptional results
• It’s critical to evaluate the corporate cultures of both organizations before drawing any conclusions about possible parallels. The journey to cultural harmony is a long one, and it ought to begin before the merger is final.
• One of the most crucial lessons was the value of listening to employees. Other major lessons were the measurement of engagement, assisting leaders in their leadership, and using the appropriate channel mix for critical audiences
Gloria Lombardi, founder of Marginalia, future of work magazine says: “Although decisions are being made at a senior level, it can’t all be a top-down communication process. Employees should have opportunities to voice concerns and ask questions without fear. Yet, leaders at every level may be resistant and uncomfortable communicating at a time when details can change.”
Key challenges
One of the major challenges during a merger is maintaining high productivity. Organizations must be open and honest with their employees in order to reduce the effects of disengagement and low productivity.
A very obvious problem during a merger is attracting, motivating, and keeping talent. This has always been the case, but there is a chance that it will become even more obvious because unhappiness is shared on social media platforms like Glassdoor, which also affects attrition and retention.
You must be willing to consider the possibility of rumors, which can be readily spread to unrelated parties. Your employees will probably draw their own conclusions about why things are happening and what the future might hold if you don’t involve them. Any fake news that reaches important stakeholders or even rivals might be harmful.
Internal Communications
Accelerating growth through mergers and acquisitions can be quite effective. But when they don’t, poor communication—including a lack of knowledge prior to the merger and a lack of cooperation and coordination afterwards—is a prevalent factor.
Employee speculation is common after a transaction is disclosed, turning many businesses into rumor mills. Many workers’ initial thought is, “Will I still have a job when this is all over?” If they do not receive the necessary responses, this may lead to fear.
Some rumors are generally unharmful, while some rumors or media leaks can hurt the organization and drive away valued employees. Not only will a lack of clarity result in time-wasting rumors, but it will also hinder employee engagement, lower productivity, and negatively affect the bottom line of the business.
It’s crucial to have open and effective communication with your staff in order to keep them informed. In this course manual, we will explore the reasons why you should manage information flow and create a comprehensive employee communications strategy ahead of a merger or acquisition.
Curriculum
Acquisitive Growth – Workshop 4 – Targeted Offerings
- Product Offerings
- Service Offerings
- Talent & Human Capital
- Transferable Capabilities
- Channels to Market
- Brand Platform
- Scope Vs Scale
- Map the ‘Gaps’
- Target Communication
Distance Learning
Introduction
Welcome to Appleton Greene and thank you for enrolling on the Acquisitive Growth corporate training program. You will be learning through our unique facilitation via distance-learning method, which will enable you to practically implement everything that you learn academically. The methods and materials used in your program have been designed and developed to ensure that you derive the maximum benefits and enjoyment possible. We hope that you find the program challenging and fun to do. However, if you have never been a distance-learner before, you may be experiencing some trepidation at the task before you. So we will get you started by giving you some basic information and guidance on how you can make the best use of the modules, how you should manage the materials and what you should be doing as you work through them. This guide is designed to point you in the right direction and help you to become an effective distance-learner. Take a few hours or so to study this guide and your guide to tutorial support for students, while making notes, before you start to study in earnest.
Study environment
You will need to locate a quiet and private place to study, preferably a room where you can easily be isolated from external disturbances or distractions. Make sure the room is well-lit and incorporates a relaxed, pleasant feel. If you can spoil yourself within your study environment, you will have much more of a chance to ensure that you are always in the right frame of mind when you do devote time to study. For example, a nice fire, the ability to play soft soothing background music, soft but effective lighting, perhaps a nice view if possible and a good size desk with a comfortable chair. Make sure that your family know when you are studying and understand your study rules. Your study environment is very important. The ideal situation, if at all possible, is to have a separate study, which can be devoted to you. If this is not possible then you will need to pay a lot more attention to developing and managing your study schedule, because it will affect other people as well as yourself. The better your study environment, the more productive you will be.
Study tools & rules
Try and make sure that your study tools are sufficient and in good working order. You will need to have access to a computer, scanner and printer, with access to the internet. You will need a very comfortable chair, which supports your lower back, and you will need a good filing system. It can be very frustrating if you are spending valuable study time trying to fix study tools that are unreliable, or unsuitable for the task. Make sure that your study tools are up to date. You will also need to consider some study rules. Some of these rules will apply to you and will be intended to help you to be more disciplined about when and how you study. This distance-learning guide will help you and after you have read it you can put some thought into what your study rules should be. You will also need to negotiate some study rules for your family, friends or anyone who lives with you. They too will need to be disciplined in order to ensure that they can support you while you study. It is important to ensure that your family and friends are an integral part of your study team. Having their support and encouragement can prove to be a crucial contribution to your successful completion of the program. Involve them in as much as you can.
Successful distance-learning
Distance-learners are freed from the necessity of attending regular classes or workshops, since they can study in their own way, at their own pace and for their own purposes. But unlike traditional internal training courses, it is the student’s responsibility, with a distance-learning program, to ensure that they manage their own study contribution. This requires strong self-discipline and self-motivation skills and there must be a clear will to succeed. Those students who are used to managing themselves, are good at managing others and who enjoy working in isolation, are more likely to be good distance-learners. It is also important to be aware of the main reasons why you are studying and of the main objectives that you are hoping to achieve as a result. You will need to remind yourself of these objectives at times when you need to motivate yourself. Never lose sight of your long-term goals and your short-term objectives. There is nobody available here to pamper you, or to look after you, or to spoon-feed you with information, so you will need to find ways to encourage and appreciate yourself while you are studying. Make sure that you chart your study progress, so that you can be sure of your achievements and re-evaluate your goals and objectives regularly.
Self-assessment
Appleton Greene training programs are in all cases post-graduate programs. Consequently, you should already have obtained a business-related degree and be an experienced learner. You should therefore already be aware of your study strengths and weaknesses. For example, which time of the day are you at your most productive? Are you a lark or an owl? What study methods do you respond to the most? Are you a consistent learner? How do you discipline yourself? How do you ensure that you enjoy yourself while studying? It is important to understand yourself as a learner and so some self-assessment early on will be necessary if you are to apply yourself correctly. Perform a SWOT analysis on yourself as a student. List your internal strengths and weaknesses as a student and your external opportunities and threats. This will help you later on when you are creating a study plan. You can then incorporate features within your study plan that can ensure that you are playing to your strengths, while compensating for your weaknesses. You can also ensure that you make the most of your opportunities, while avoiding the potential threats to your success.
Accepting responsibility as a student
Training programs invariably require a significant investment, both in terms of what they cost and in the time that you need to contribute to study and the responsibility for successful completion of training programs rests entirely with the student. This is never more apparent than when a student is learning via distance-learning. Accepting responsibility as a student is an important step towards ensuring that you can successfully complete your training program. It is easy to instantly blame other people or factors when things go wrong. But the fact of the matter is that if a failure is your failure, then you have the power to do something about it, it is entirely in your own hands. If it is always someone else’s failure, then you are powerless to do anything about it. All students study in entirely different ways, this is because we are all individuals and what is right for one student, is not necessarily right for another. In order to succeed, you will have to accept personal responsibility for finding a way to plan, implement and manage a personal study plan that works for you. If you do not succeed, you only have yourself to blame.
Planning
By far the most critical contribution to stress, is the feeling of not being in control. In the absence of planning we tend to be reactive and can stumble from pillar to post in the hope that things will turn out fine in the end. Invariably they don’t! In order to be in control, we need to have firm ideas about how and when we want to do things. We also need to consider as many possible eventualities as we can, so that we are prepared for them when they happen. Prescriptive Change, is far easier to manage and control, than Emergent Change. The same is true with distance-learning. It is much easier and much more enjoyable, if you feel that you are in control and that things are going to plan. Even when things do go wrong, you are prepared for them and can act accordingly without any unnecessary stress. It is important therefore that you do take time to plan your studies properly.
Management
Once you have developed a clear study plan, it is of equal importance to ensure that you manage the implementation of it. Most of us usually enjoy planning, but it is usually during implementation when things go wrong. Targets are not met and we do not understand why. Sometimes we do not even know if targets are being met. It is not enough for us to conclude that the study plan just failed. If it is failing, you will need to understand what you can do about it. Similarly if your study plan is succeeding, it is still important to understand why, so that you can improve upon your success. You therefore need to have guidelines for self-assessment so that you can be consistent with performance improvement throughout the program. If you manage things correctly, then your performance should constantly improve throughout the program.
Study objectives & tasks
The first place to start is developing your program objectives. These should feature your reasons for undertaking the training program in order of priority. Keep them succinct and to the point in order to avoid confusion. Do not just write the first things that come into your head because they are likely to be too similar to each other. Make a list of possible departmental headings, such as: Customer Service; E-business; Finance; Globalization; Human Resources; Technology; Legal; Management; Marketing and Production. Then brainstorm for ideas by listing as many things that you want to achieve under each heading and later re-arrange these things in order of priority. Finally, select the top item from each department heading and choose these as your program objectives. Try and restrict yourself to five because it will enable you to focus clearly. It is likely that the other things that you listed will be achieved if each of the top objectives are achieved. If this does not prove to be the case, then simply work through the process again.
Study forecast
As a guide, the Appleton Greene Acquisitive Growth corporate training program should take 12-18 months to complete, depending upon your availability and current commitments. The reason why there is such a variance in time estimates is because every student is an individual, with differing productivity levels and different commitments. These differentiations are then exaggerated by the fact that this is a distance-learning program, which incorporates the practical integration of academic theory as an as a part of the training program. Consequently all of the project studies are real, which means that important decisions and compromises need to be made. You will want to get things right and will need to be patient with your expectations in order to ensure that they are. We would always recommend that you are prudent with your own task and time forecasts, but you still need to develop them and have a clear indication of what are realistic expectations in your case. With reference to your time planning: consider the time that you can realistically dedicate towards study with the program every week; calculate how long it should take you to complete the program, using the guidelines featured here; then break the program down into logical modules and allocate a suitable proportion of time to each of them, these will be your milestones; you can create a time plan by using a spreadsheet on your computer, or a personal organizer such as MS Outlook, you could also use a financial forecasting software; break your time forecasts down into manageable chunks of time, the more specific you can be, the more productive and accurate your time management will be; finally, use formulas where possible to do your time calculations for you, because this will help later on when your forecasts need to change in line with actual performance. With reference to your task planning: refer to your list of tasks that need to be undertaken in order to achieve your program objectives; with reference to your time plan, calculate when each task should be implemented; remember that you are not estimating when your objectives will be achieved, but when you will need to focus upon implementing the corresponding tasks; you also need to ensure that each task is implemented in conjunction with the associated training modules which are relevant; then break each single task down into a list of specific to do’s, say approximately ten to do’s for each task and enter these into your study plan; once again you could use MS Outlook to incorporate both your time and task planning and this could constitute your study plan; you could also use a project management software like MS Project. You should now have a clear and realistic forecast detailing when you can expect to be able to do something about undertaking the tasks to achieve your program objectives.
Performance management
It is one thing to develop your study forecast, it is quite another to monitor your progress. Ultimately it is less important whether you achieve your original study forecast and more important that you update it so that it constantly remains realistic in line with your performance. As you begin to work through the program, you will begin to have more of an idea about your own personal performance and productivity levels as a distance-learner. Once you have completed your first study module, you should re-evaluate your study forecast for both time and tasks, so that they reflect your actual performance level achieved. In order to achieve this you must first time yourself while training by using an alarm clock. Set the alarm for hourly intervals and make a note of how far you have come within that time. You can then make a note of your actual performance on your study plan and then compare your performance against your forecast. Then consider the reasons that have contributed towards your performance level, whether they are positive or negative and make a considered adjustment to your future forecasts as a result. Given time, you should start achieving your forecasts regularly.
With reference to time management: time yourself while you are studying and make a note of the actual time taken in your study plan; consider your successes with time-efficiency and the reasons for the success in each case and take this into consideration when reviewing future time planning; consider your failures with time-efficiency and the reasons for the failures in each case and take this into consideration when reviewing future time planning; re-evaluate your study forecast in relation to time planning for the remainder of your training program to ensure that you continue to be realistic about your time expectations. You need to be consistent with your time management, otherwise you will never complete your studies. This will either be because you are not contributing enough time to your studies, or you will become less efficient with the time that you do allocate to your studies. Remember, if you are not in control of your studies, they can just become yet another cause of stress for you.
With reference to your task management: time yourself while you are studying and make a note of the actual tasks that you have undertaken in your study plan; consider your successes with task-efficiency and the reasons for the success in each case; take this into consideration when reviewing future task planning; consider your failures with task-efficiency and the reasons for the failures in each case and take this into consideration when reviewing future task planning; re-evaluate your study forecast in relation to task planning for the remainder of your training program to ensure that you continue to be realistic about your task expectations. You need to be consistent with your task management, otherwise you will never know whether you are achieving your program objectives or not.
Keeping in touch
You will have access to qualified and experienced professors and tutors who are responsible for providing tutorial support for your particular training program. So don’t be shy about letting them know how you are getting on. We keep electronic records of all tutorial support emails so that professors and tutors can review previous correspondence before considering an individual response. It also means that there is a record of all communications between you and your professors and tutors and this helps to avoid any unnecessary duplication, misunderstanding, or misinterpretation. If you have a problem relating to the program, share it with them via email. It is likely that they have come across the same problem before and are usually able to make helpful suggestions and steer you in the right direction. To learn more about when and how to use tutorial support, please refer to the Tutorial Support section of this student information guide. This will help you to ensure that you are making the most of tutorial support that is available to you and will ultimately contribute towards your success and enjoyment with your training program.
Work colleagues and family
You should certainly discuss your program study progress with your colleagues, friends and your family. Appleton Greene training programs are very practical. They require you to seek information from other people, to plan, develop and implement processes with other people and to achieve feedback from other people in relation to viability and productivity. You will therefore have plenty of opportunities to test your ideas and enlist the views of others. People tend to be sympathetic towards distance-learners, so don’t bottle it all up in yourself. Get out there and share it! It is also likely that your family and colleagues are going to benefit from your labors with the program, so they are likely to be much more interested in being involved than you might think. Be bold about delegating work to those who might benefit themselves. This is a great way to achieve understanding and commitment from people who you may later rely upon for process implementation. Share your experiences with your friends and family.
Making it relevant
The key to successful learning is to make it relevant to your own individual circumstances. At all times you should be trying to make bridges between the content of the program and your own situation. Whether you achieve this through quiet reflection or through interactive discussion with your colleagues, client partners or your family, remember that it is the most important and rewarding aspect of translating your studies into real self-improvement. You should be clear about how you want the program to benefit you. This involves setting clear study objectives in relation to the content of the course in terms of understanding, concepts, completing research or reviewing activities and relating the content of the modules to your own situation. Your objectives may understandably change as you work through the program, in which case you should enter the revised objectives on your study plan so that you have a permanent reminder of what you are trying to achieve, when and why.
Distance-learning check-list
Prepare your study environment, your study tools and rules.
Undertake detailed self-assessment in terms of your ability as a learner.
Create a format for your study plan.
Consider your study objectives and tasks.
Create a study forecast.
Assess your study performance.
Re-evaluate your study forecast.
Be consistent when managing your study plan.
Use your Appleton Greene Certified Learning Provider (CLP) for tutorial support.
Make sure you keep in touch with those around you.
Tutorial Support
Programs
Appleton Greene uses standard and bespoke corporate training programs as vessels to transfer business process improvement knowledge into the heart of our clients’ organizations. Each individual program focuses upon the implementation of a specific business process, which enables clients to easily quantify their return on investment. There are hundreds of established Appleton Greene corporate training products now available to clients within customer services, e-business, finance, globalization, human resources, information technology, legal, management, marketing and production. It does not matter whether a client’s employees are located within one office, or an unlimited number of international offices, we can still bring them together to learn and implement specific business processes collectively. Our approach to global localization enables us to provide clients with a truly international service with that all important personal touch. Appleton Greene corporate training programs can be provided virtually or locally and they are all unique in that they individually focus upon a specific business function. They are implemented over a sustainable period of time and professional support is consistently provided by qualified learning providers and specialist consultants.
Support available
You will have a designated Certified Learning Provider (CLP) and an Accredited Consultant and we encourage you to communicate with them as much as possible. In all cases tutorial support is provided online because we can then keep a record of all communications to ensure that tutorial support remains consistent. You would also be forwarding your work to the tutorial support unit for evaluation and assessment. You will receive individual feedback on all of the work that you undertake on a one-to-one basis, together with specific recommendations for anything that may need to be changed in order to achieve a pass with merit or a pass with distinction and you then have as many opportunities as you may need to re-submit project studies until they meet with the required standard. Consequently the only reason that you should really fail (CLP) is if you do not do the work. It makes no difference to us whether a student takes 12 months or 18 months to complete the program, what matters is that in all cases the same quality standard will have been achieved.
Support Process
Please forward all of your future emails to the designated (CLP) Tutorial Support Unit email address that has been provided and please do not duplicate or copy your emails to other AGC email accounts as this will just cause unnecessary administration. Please note that emails are always answered as quickly as possible but you will need to allow a period of up to 20 business days for responses to general tutorial support emails during busy periods, because emails are answered strictly within the order in which they are received. You will also need to allow a period of up to 30 business days for the evaluation and assessment of project studies. This does not include weekends or public holidays. Please therefore kindly allow for this within your time planning. All communications are managed online via email because it enables tutorial service support managers to review other communications which have been received before responding and it ensures that there is a copy of all communications retained on file for future reference. All communications will be stored within your personal (CLP) study file here at Appleton Greene throughout your designated study period. If you need any assistance or clarification at any time, please do not hesitate to contact us by forwarding an email and remember that we are here to help. If you have any questions, please list and number your questions succinctly and you can then be sure of receiving specific answers to each and every query.
Time Management
It takes approximately 1 Year to complete the Acquisitive Growth corporate training program, incorporating 12 x 6-hour monthly workshops. Each student will also need to contribute approximately 4 hours per week over 1 Year of their personal time. Students can study from home or work at their own pace and are responsible for managing their own study plan. There are no formal examinations and students are evaluated and assessed based upon their project study submissions, together with the quality of their internal analysis and supporting documents. They can contribute more time towards study when they have the time to do so and can contribute less time when they are busy. All students tend to be in full time employment while studying and the Acquisitive Growth program is purposely designed to accommodate this, so there is plenty of flexibility in terms of time management. It makes no difference to us at Appleton Greene, whether individuals take 12-18 months to complete this program. What matters is that in all cases the same standard of quality will have been achieved with the standard and bespoke programs that have been developed.
Distance Learning Guide
The distance learning guide should be your first port of call when starting your training program. It will help you when you are planning how and when to study, how to create the right environment and how to establish the right frame of mind. If you can lay the foundations properly during the planning stage, then it will contribute to your enjoyment and productivity while training later. The guide helps to change your lifestyle in order to accommodate time for study and to cultivate good study habits. It helps you to chart your progress so that you can measure your performance and achieve your goals. It explains the tools that you will need for study and how to make them work. It also explains how to translate academic theory into practical reality. Spend some time now working through your distance learning guide and make sure that you have firm foundations in place so that you can make the most of your distance learning program. There is no requirement for you to attend training workshops or classes at Appleton Greene offices. The entire program is undertaken online, program course manuals and project studies are administered via the Appleton Greene web site and via email, so you are able to study at your own pace and in the comfort of your own home or office as long as you have a computer and access to the internet.
How To Study
The how to study guide provides students with a clear understanding of the Appleton Greene facilitation via distance learning training methods and enables students to obtain a clear overview of the training program content. It enables students to understand the step-by-step training methods used by Appleton Greene and how course manuals are integrated with project studies. It explains the research and development that is required and the need to provide evidence and references to support your statements. It also enables students to understand precisely what will be required of them in order to achieve a pass with merit and a pass with distinction for individual project studies and provides useful guidance on how to be innovative and creative when developing your Unique Program Proposition (UPP).
Tutorial Support
Tutorial support for the Appleton Greene Acquisitive Growth corporate training program is provided online either through the Appleton Greene Client Support Portal (CSP), or via email. All tutorial support requests are facilitated by a designated Program Administration Manager (PAM). They are responsible for deciding which professor or tutor is the most appropriate option relating to the support required and then the tutorial support request is forwarded onto them. Once the professor or tutor has completed the tutorial support request and answered any questions that have been asked, this communication is then returned to the student via email by the designated Program Administration Manager (PAM). This enables all tutorial support, between students, professors and tutors, to be facilitated by the designated Program Administration Manager (PAM) efficiently and securely through the email account. You will therefore need to allow a period of up to 20 business days for responses to general support queries and up to 30 business days for the evaluation and assessment of project studies, because all tutorial support requests are answered strictly within the order in which they are received. This does not include weekends or public holidays. Consequently you need to put some thought into the management of your tutorial support procedure in order to ensure that your study plan is feasible and to obtain the maximum possible benefit from tutorial support during your period of study. Please retain copies of your tutorial support emails for future reference. Please ensure that ALL of your tutorial support emails are set out using the format as suggested within your guide to tutorial support. Your tutorial support emails need to be referenced clearly to the specific part of the course manual or project study which you are working on at any given time. You also need to list and number any questions that you would like to ask, up to a maximum of five questions within each tutorial support email. Remember the more specific you can be with your questions the more specific your answers will be too and this will help you to avoid any unnecessary misunderstanding, misinterpretation, or duplication. The guide to tutorial support is intended to help you to understand how and when to use support in order to ensure that you get the most out of your training program. Appleton Greene training programs are designed to enable you to do things for yourself. They provide you with a structure or a framework and we use tutorial support to facilitate students while they practically implement what they learn. In other words, we are enabling students to do things for themselves. The benefits of distance learning via facilitation are considerable and are much more sustainable in the long-term than traditional short-term knowledge sharing programs. Consequently you should learn how and when to use tutorial support so that you can maximize the benefits from your learning experience with Appleton Greene. This guide describes the purpose of each training function and how to use them and how to use tutorial support in relation to each aspect of the training program. It also provides useful tips and guidance with regard to best practice.
Tutorial Support Tips
Students are often unsure about how and when to use tutorial support with Appleton Greene. This Tip List will help you to understand more about how to achieve the most from using tutorial support. Refer to it regularly to ensure that you are continuing to use the service properly. Tutorial support is critical to the success of your training experience, but it is important to understand when and how to use it in order to maximize the benefit that you receive. It is no coincidence that those students who succeed are those that learn how to be positive, proactive and productive when using tutorial support.
Be positive and friendly with your tutorial support emails
Remember that if you forward an email to the tutorial support unit, you are dealing with real people. “Do unto others as you would expect others to do unto you”. If you are positive, complimentary and generally friendly in your emails, you will generate a similar response in return. This will be more enjoyable, productive and rewarding for you in the long-term.
Think about the impression that you want to create
Every time that you communicate, you create an impression, which can be either positive or negative, so put some thought into the impression that you want to create. Remember that copies of all tutorial support emails are stored electronically and tutors will always refer to prior correspondence before responding to any current emails. Over a period of time, a general opinion will be arrived at in relation to your character, attitude and ability. Try to manage your own frustrations, mood swings and temperament professionally, without involving the tutorial support team. Demonstrating frustration or a lack of patience is a weakness and will be interpreted as such. The good thing about communicating in writing, is that you will have the time to consider your content carefully, you can review it and proof-read it before sending your email to Appleton Greene and this should help you to communicate more professionally, consistently and to avoid any unnecessary knee-jerk reactions to individual situations as and when they may arise. Please also remember that the CLP Tutorial Support Unit will not just be responsible for evaluating and assessing the quality of your work, they will also be responsible for providing recommendations to other learning providers and to client contacts within the Appleton Greene global client network, so do be in control of your own emotions and try to create a good impression.
Remember that quality is preferred to quantity
Please remember that when you send an email to the tutorial support team, you are not using Twitter or Text Messaging. Try not to forward an email every time that you have a thought. This will not prove to be productive either for you or for the tutorial support team. Take time to prepare your communications properly, as if you were writing a professional letter to a business colleague and make a list of queries that you are likely to have and then incorporate them within one email, say once every month, so that the tutorial support team can understand more about context, application and your methodology for study. Get yourself into a consistent routine with your tutorial support requests and use the tutorial support template provided with ALL of your emails. The (CLP) Tutorial Support Unit will not spoon-feed you with information. They need to be able to evaluate and assess your tutorial support requests carefully and professionally.
Be specific about your questions in order to receive specific answers
Try not to write essays by thinking as you are writing tutorial support emails. The tutorial support unit can be unclear about what in fact you are asking, or what you are looking to achieve. Be specific about asking questions that you want answers to. Number your questions. You will then receive specific answers to each and every question. This is the main purpose of tutorial support via email.
Keep a record of your tutorial support emails
It is important that you keep a record of all tutorial support emails that are forwarded to you. You can then refer to them when necessary and it avoids any unnecessary duplication, misunderstanding, or misinterpretation.
Individual training workshops or telephone support
Please be advised that Appleton Greene does not provide separate or individual tutorial support meetings, workshops, or provide telephone support for individual students. Appleton Greene is an equal opportunities learning and service provider and we are therefore understandably bound to treat all students equally. We cannot therefore broker special financial or study arrangements with individual students regardless of the circumstances. All tutorial support is provided online and this enables Appleton Greene to keep a record of all communications between students, professors and tutors on file for future reference, in accordance with our quality management procedure and your terms and conditions of enrolment. All tutorial support is provided online via email because it enables us to have time to consider support content carefully, it ensures that you receive a considered and detailed response to your queries. You can number questions that you would like to ask, which relate to things that you do not understand or where clarification may be required. You can then be sure of receiving specific answers to each individual query. You will also then have a record of these communications and of all tutorial support, which has been provided to you. This makes tutorial support administration more productive by avoiding any unnecessary duplication, misunderstanding, or misinterpretation.
Tutorial Support Email Format
You should use this tutorial support format if you need to request clarification or assistance while studying with your training program. Please note that ALL of your tutorial support request emails should use the same format. You should therefore set up a standard email template, which you can then use as and when you need to. Emails that are forwarded to Appleton Greene, which do not use the following format, may be rejected and returned to you by the (CLP) Program Administration Manager. A detailed response will then be forwarded to you via email usually within 20 business days of receipt for general support queries and 30 business days for the evaluation and assessment of project studies. This does not include weekends or public holidays. Your tutorial support request, together with the corresponding TSU reply, will then be saved and stored within your electronic TSU file at Appleton Greene for future reference.
Subject line of your email
Please insert: Appleton Greene (CLP) Tutorial Support Request: (Your Full Name) (Date), within the subject line of your email.
Main body of your email
Please insert:
1. Appleton Greene Certified Learning Provider (CLP) Tutorial Support Request
2. Your Full Name
3. Date of TS request
4. Preferred email address
5. Backup email address
6. Course manual page name or number (reference)
7. Project study page name or number (reference)
Subject of enquiry
Please insert a maximum of 50 words (please be succinct)
Briefly outline the subject matter of your inquiry, or what your questions relate to.
Question 1
Maximum of 50 words (please be succinct)
Maximum of 50 words (please be succinct)
Question 3
Maximum of 50 words (please be succinct)
Question 4
Maximum of 50 words (please be succinct)
Question 5
Maximum of 50 words (please be succinct)
Please note that a maximum of 5 questions is permitted with each individual tutorial support request email.
Procedure
* List the questions that you want to ask first, then re-arrange them in order of priority. Make sure that you reference them, where necessary, to the course manuals or project studies.
* Make sure that you are specific about your questions and number them. Try to plan the content within your emails to make sure that it is relevant.
* Make sure that your tutorial support emails are set out correctly, using the Tutorial Support Email Format provided here.
* Save a copy of your email and incorporate the date sent after the subject title. Keep your tutorial support emails within the same file and in date order for easy reference.
* Allow up to 20 business days for a response to general tutorial support emails and up to 30 business days for the evaluation and assessment of project studies, because detailed individual responses will be made in all cases and tutorial support emails are answered strictly within the order in which they are received.
* Emails can and do get lost. So if you have not received a reply within the appropriate time, forward another copy or a reminder to the tutorial support unit to be sure that it has been received but do not forward reminders unless the appropriate time has elapsed.
* When you receive a reply, save it immediately featuring the date of receipt after the subject heading for easy reference. In most cases the tutorial support unit replies to your questions individually, so you will have a record of the questions that you asked as well as the answers offered. With project studies however, separate emails are usually forwarded by the tutorial support unit, so do keep a record of your own original emails as well.
* Remember to be positive and friendly in your emails. You are dealing with real people who will respond to the same things that you respond to.
* Try not to repeat questions that have already been asked in previous emails. If this happens the tutorial support unit will probably just refer you to the appropriate answers that have already been provided within previous emails.
* If you lose your tutorial support email records you can write to Appleton Greene to receive a copy of your tutorial support file, but a separate administration charge may be levied for this service.
How To Study
Your Certified Learning Provider (CLP) and Accredited Consultant can help you to plan a task list for getting started so that you can be clear about your direction and your priorities in relation to your training program. It is also a good way to introduce yourself to the tutorial support team.
Planning your study environment
Your study conditions are of great importance and will have a direct effect on how much you enjoy your training program. Consider how much space you will have, whether it is comfortable and private and whether you are likely to be disturbed. The study tools and facilities at your disposal are also important to the success of your distance-learning experience. Your tutorial support unit can help with useful tips and guidance, regardless of your starting position. It is important to get this right before you start working on your training program.
Planning your program objectives
It is important that you have a clear list of study objectives, in order of priority, before you start working on your training program. Your tutorial support unit can offer assistance here to ensure that your study objectives have been afforded due consideration and priority.
Planning how and when to study
Distance-learners are freed from the necessity of attending regular classes, since they can study in their own way, at their own pace and for their own purposes. This approach is designed to let you study efficiently away from the traditional classroom environment. It is important however, that you plan how and when to study, so that you are making the most of your natural attributes, strengths and opportunities. Your tutorial support unit can offer assistance and useful tips to ensure that you are playing to your strengths.
Planning your study tasks
You should have a clear understanding of the study tasks that you should be undertaking and the priority associated with each task. These tasks should also be integrated with your program objectives. The distance learning guide and the guide to tutorial support for students should help you here, but if you need any clarification or assistance, please contact your tutorial support unit.
Planning your time
You will need to allocate specific times during your calendar when you intend to study if you are to have a realistic chance of completing your program on time. You are responsible for planning and managing your own study time, so it is important that you are successful with this. Your tutorial support unit can help you with this if your time plan is not working.
Keeping in touch
Consistency is the key here. If you communicate too frequently in short bursts, or too infrequently with no pattern, then your management ability with your studies will be questioned, both by you and by your tutorial support unit. It is obvious when a student is in control and when one is not and this will depend how able you are at sticking with your study plan. Inconsistency invariably leads to in-completion.
Charting your progress
Your tutorial support team can help you to chart your own study progress. Refer to your distance learning guide for further details.
Making it work
To succeed, all that you will need to do is apply yourself to undertaking your training program and interpreting it correctly. Success or failure lies in your hands and your hands alone, so be sure that you have a strategy for making it work. Your Certified Learning Provider (CLP) and Accredited Consultant can guide you through the process of program planning, development and implementation.
Reading methods
Interpretation is often unique to the individual but it can be improved and even quantified by implementing consistent interpretation methods. Interpretation can be affected by outside interference such as family members, TV, or the Internet, or simply by other thoughts which are demanding priority in our minds. One thing that can improve our productivity is using recognized reading methods. This helps us to focus and to be more structured when reading information for reasons of importance, rather than relaxation.
Speed reading
When reading through course manuals for the first time, subconsciously set your reading speed to be just fast enough that you cannot dwell on individual words or tables. With practice, you should be able to read an A4 sheet of paper in one minute. You will not achieve much in the way of a detailed understanding, but your brain will retain a useful overview. This overview will be important later on and will enable you to keep individual issues in perspective with a more generic picture because speed reading appeals to the memory part of the brain. Do not worry about what you do or do not remember at this stage.
Content reading
Once you have speed read everything, you can then start work in earnest. You now need to read a particular section of your course manual thoroughly, by making detailed notes while you read. This process is called Content Reading and it will help to consolidate your understanding and interpretation of the information that has been provided.
Making structured notes on the course manuals
When you are content reading, you should be making detailed notes, which are both structured and informative. Make these notes in a MS Word document on your computer, because you can then amend and update these as and when you deem it to be necessary. List your notes under three headings: 1. Interpretation – 2. Questions – 3. Tasks. The purpose of the 1st section is to clarify your interpretation by writing it down. The purpose of the 2nd section is to list any questions that the issue raises for you. The purpose of the 3rd section is to list any tasks that you should undertake as a result. Anyone who has graduated with a business-related degree should already be familiar with this process.
Organizing structured notes separately
You should then transfer your notes to a separate study notebook, preferably one that enables easy referencing, such as a MS Word Document, a MS Excel Spreadsheet, a MS Access Database, or a personal organizer on your cell phone. Transferring your notes allows you to have the opportunity of cross-checking and verifying them, which assists considerably with understanding and interpretation. You will also find that the better you are at doing this, the more chance you will have of ensuring that you achieve your study objectives.
Question your understanding
Do challenge your understanding. Explain things to yourself in your own words by writing things down.
Clarifying your understanding
If you are at all unsure, forward an email to your tutorial support unit and they will help to clarify your understanding.
Question your interpretation
Do challenge your interpretation. Qualify your interpretation by writing it down.
Clarifying your interpretation
If you are at all unsure, forward an email to your tutorial support unit and they will help to clarify your interpretation.
Qualification Requirements
The student will need to successfully complete the project study and all of the exercises relating to the Acquisitive Growth corporate training program, achieving a pass with merit or distinction in each case, in order to qualify as an Accredited Acquisitive Growth Specialist (AAGS). All monthly workshops need to be tried and tested within your company. These project studies can be completed in your own time and at your own pace and in the comfort of your own home or office. There are no formal examinations, assessment is based upon the successful completion of the project studies. They are called project studies because, unlike case studies, these projects are not theoretical, they incorporate real program processes that need to be properly researched and developed. The project studies assist us in measuring your understanding and interpretation of the training program and enable us to assess qualification merits. All of the project studies are based entirely upon the content within the training program and they enable you to integrate what you have learnt into your corporate training practice.
Acquisitive Growth – Grading Contribution
Project Study – Grading Contribution
Customer Service – 10%
E-business – 05%
Finance – 10%
Globalization – 10%
Human Resources – 10%
Information Technology – 10%
Legal – 05%
Management – 10%
Marketing – 10%
Production – 10%
Education – 05%
Logistics – 05%
TOTAL GRADING – 100%
Qualification grades
A mark of 90% = Pass with Distinction.
A mark of 75% = Pass with Merit.
A mark of less than 75% = Fail.
If you fail to achieve a mark of 75% with a project study, you will receive detailed feedback from the Certified Learning Provider (CLP) and/or Accredited Consultant, together with a list of tasks which you will need to complete, in order to ensure that your project study meets with the minimum quality standard that is required by Appleton Greene. You can then re-submit your project study for further evaluation and assessment. Indeed you can re-submit as many drafts of your project studies as you need to, until such a time as they eventually meet with the required standard by Appleton Greene, so you need not worry about this, it is all part of the learning process.
When marking project studies, Appleton Greene is looking for sufficient evidence of the following:
Pass with merit
A satisfactory level of program understanding
A satisfactory level of program interpretation
A satisfactory level of project study content presentation
A satisfactory level of Unique Program Proposition (UPP) quality
A satisfactory level of the practical integration of academic theory
Pass with distinction
An exceptional level of program understanding
An exceptional level of program interpretation
An exceptional level of project study content presentation
An exceptional level of Unique Program Proposition (UPP) quality
An exceptional level of the practical integration of academic theory
Preliminary Analysis
Research Article
“Pre-merger acquisition capabilities: A study of two successful serial acquirers
By Michael Grant,
Fredrik Nilsson,
Anna-Carin Nordvall,
European Management Journal
Abstract
The aim of this paper is to provide new insights into the pre-merger phase of M&A. It examines capabilities of serial acquirers, that is, expertise and routines. This is done by conducting a study of two successful serial acquirers. The study identifies and describes what elements expertise and routines consist of and how they are related, explaining how both are needed for a successful pre-merger phase. Moreover, it consolidates present knowledge on expertise and routines in the pre-merger phase and adds new empirical and theoretical insights. The result is the pre-merger capability typology showing in a fine-grained manner which capabilities and elements are important. Arguably, the study provides a holistic view of acquisition capabilities of successful serial acquirers in the pre-merger phase.
Introduction
Why some acquisitions fail and some succeed has made researchers interested in acquisition capabilities (e.g. Chatterjee, 2009; Keil et al., 2012; Laamanen & Keil, 2008). These capabilities are characterized by their ability to use resources (e.g. financial, material, and immaterial assets) in ways that enhance competitive advantage (Ethiraj et al., 2005). According to Keil et al. (2012) acquisition capabilities are of two kinds: (1) individual skills and expertise (hereafter expertise1) and (2) organizational routines, rules, and procedures (hereafter routines).
Previous studies of acquisition capabilities have informed us about post-merger integration, especially how to successfully integrate the target firm and reconfigure the resource base (e.g. Graebner et al., 2017). However, the pre-merger phase has received far less attention, mainly due to difficulties gaining access to this sensitive part of the process. There are some studies about routines (e.g. Angwin et al., 2015) but even fewer about expertise (e.g. Chatterjee, 2009). Studies of expertise are also lacking in the field of acquisition experience and learning as shown in a literature review by Schriber and Degischer (2020).
Given the dearth of knowledge in an area of importance for practitioners and scholars, the overall objective of the present paper is to contribute to the literature on acquisition capabilities. Specifically, it consolidates present knowledge on expertise and routines in the pre-merger phase. In addition, it empirically identifies the elements that these two capabilities consist of and how they are related and affect one another. In relation to the pre-merger phase, the paper focuses on identifying and selecting targets (hereafter identification) and the process from initiation to completion (hereafter acquisition-making).
The context chosen is successful serial acquirers. They are expected to have a well-designed and successful acquisition program in which expertise and routines are crucial capabilities (Chatterjee, 2009; Laamanen & Keil, 2008). The present paper is based on two case studies. The study made it possible to identify elements of expertise and routines that are crucial for a successful acquisition program.
The paper makes the following contributions. First, qualitative research of the pre-merger phase is to a large extent lacking, particularly on expertise and routines (Grant et al., 2015). By de-composing expertise and routines into elements the paper adds new knowledge about what characterizes expertise and routines. Such a fine-grained analysis is an answer to calls for more in-depth research of the pre-merger phase (Trichterborn et al., 2016; Welch et al., 2020). The identification of elements adds details to the few empirical papers that have studied expertise (e.g. Grant & Nilsson, 2020) and routines (e.g. Angwin et al., 2015). Most of these studies only identify the importance of expertise and routines but have neither studied them in detail nor shown what elements do they consist of.
Second, the study consolidates present knowledge on expertise and routines in the pre-merger phase and adds new empirical and theoretical insights. The result is the pre-merger capability typology. This typology contributes to the literature on successful serial acquirers (Chatterjee, 2009; Haspeslagh & Jemison, 1991; Laamanen & Keil, 2008), by showing in a fine-grained manner which capabilities and elements are important and how they relate to the identification and acquisition-making phases.
Third, even though Keil et al. (2012) have identified expertise and routines as important capabilities, there is a scarcity of empirical studies that show how they are related. By applying a holistic perspective, the present study contributes new insights to the literature by explaining how both expertise and routines are needed for a successful pre-merger phase. For example, a study that focuses on expertise, risks de-emphasizing how routines can contribute to deliberate learning that both maintain and develop expertise (e.g. Grant & Nilsson, 2020; Keil et al., 2012). Similarly, a study that focuses on routines, risks applying a functionalistic perspective in which tacit knowledge – a fundamental aspect of expertise – is not recognized (Schriber & Degischer, 2020).
In sum, the present paper contributes to reshaping scholarship by broadening the boundaries of the M&A research agenda. It is thus an answer to the call for such research by Thanos et al. (2019). The paper presents a novel approach to the study of acquisition capabilities with its focus on the pre-merger phase. Furthermore, it overcomes the “traditional silo thinking” (ibid.) by showing the importance of both routines and expertise in the identification (of targets) and acquisition-making. Thus, the paper contributes to an increased understanding of M&A-processes and the importance of a holistic perspective on acquisition-capabilities.
The paper is structured as follows. The next section describes the literature on acquisition capabilities. The method is presented thereafter. The subsequent sections are an account and discussion of the cases. The paper ends with conclusions and suggestions for future research.”
If you would like to continue reading this research paper, please visit: www.sciencedirect.com
Online Article
“Find Your Value: Offering A Product Vs. Offering A Service
By Sean Manning,
Forbes
Every business is selling something. It’s either something you can hold or something that stays with you experientially, but each business needs to search for the thing that makes what it offers unique. Whether you recognize it or not, consumers are constantly evaluating their spending, with about 40% switching brands during the pandemic. No matter the product or service being provided, customers and clients are looking for one thing: value.
This is one reason founders spend so much time in the early stages of business doing diligent research about the market or their competitors. Once you have a brilliant idea that sparks your interest in opening a new business, you should define what you do well and determine where the market is falling short of meeting certain consumer demands. That will set you apart from the crowded competition for your customer’s attention and set you on the path to long-term success. It’s important, though, to understand exactly what your business offers.
Remember what is objective vs. subjective.
When starting my boutique payroll business, this was a major part of creating the business plan. Yes, we offer certain products such as simple software and, in some ways, our expertise in general. But what we really offer is a service to small businesses. It was important for our team, like every business, to remember which of those could be measured in which ways.
Products are tangible but should be measured both objectively and subjectively. A product can be purchased and used by the customer, and there is an objective utility considering whether it works or doesn’t. There’s also the subjective feeling of the customer, such as the ease of the user experience on a new smartphone.
Services are much more subjective and should be approached with that in mind. They are more dependent on the experience of the customer and their perspective on the value they received during the service. Yes, a small-business owner could enjoy the ease of our payroll operations. However, they might actually value the simple service of a local expert who is available to answer questions.
Consider this in your daily business.
Both products and services rely on the ability to sell an idea. This shampoo will give you bouncier hair, while this business coaching seminar will help you become a more effective leader. No matter what your business offers, your goal is to appeal to the wants and needs of your target audience. But that doesn’t mean there are one-size-fits-all approaches when it comes to products and services.
Products can often stand alone and market themselves. Items that can be picked up off a counter or shelf can be more easily understood; customers either enjoy using the product or they don’t. While it may be easier to build consumer interest with new products, services provide businesses with the ability to connect more directly with the consumer and build lasting trust. So, even if you offer a product, you should aspire to provide valuable service along with it.
Across the board, people appreciate being listened to and valued and are, therefore, more likely to revisit or re-purchase when they have a relationship with a brand or a business. Studies show that those relationships also make it more likely that customers will refer others to their favorite brands. Since services are more relationship-based, it is essential for service-based companies to continually engage with their customers, collect feedback and adapt their approach to ensure they are providing the best possible experience. Consistently addressing questions and feedback will show your customers you are paying attention, and, even if it takes time, your business will grow.”
If you would like to view the original article, please visit: www.forbes.com
Online Article
“Steps To Identify Your Target Market
By Chuck Cohn,
Forbes
You have put in the long hours and finally finished making that killer product or service, but your work is not yet done – now you need to introduce people to this offering. While it is relatively simple to develop general advertising for the masses, devoting time and resources to identify more targeted markets can help you maximize your marketing ROI.
Ford and GM likely know that marketing pick-up trucks to drivers in North Dakota or Texas is more effective than doing so in California or New York. Likewise, whenever my company, Varsity Tutors, introduces a new service, such as online tutoring, we carefully analyze who we market to, how, and when.
This process – knowing to whom and when to market your product or service – can result in much higher rates of return, and it involves implementing systems, rather than relying on indiscriminate marketing. If you are not sure where to begin, the steps below can help you identify your target market.
1. Sharpen your focus
One of the most effective things you can do to market your product smartly and efficiently is narrow your gaze – in other words, prioritize. Which efforts should you prioritize? Here are three tips to help you focus your marketing approaches:
A. Determine what needs your product fulfills
Who is most likely to use your product? As you answer this question, consider factors like age, buying power, geographical location, and marital status. Take, for instance, a recent college graduate who has just started her first job – she will have different needs than a mother of four teenage children. Both women require food and shelter, but at the same time, they might choose to spend their discretionary income in very different ways. Almost 50% of millennial women, for instance, shop for clothes more than twice a month, compared to only 36% of women from older generations. Millennial men, meanwhile, spend twice as much on clothing as non-millennials do.
What does this mean in a business context? If you are a clothing retailer, whether you are offering $15 t-shirts or $500 coats will lead to you very different target markets. T-shirts that retail for $15 can be bought multiple times each year, while a $500 coat might be a once-in-a-lifetime purchase. If you plan to sell $15 t-shirts, you now have a clearer idea of your target market: millennials who want variety at a lower cost.
B. Use a funnel approach
For some CEOs, it might be helpful to think of the market selection process as a multiple staged funnel. For example, your first bucket might be gender. If your product or service is gender-specific, you can immediately narrow your audience. Your second filter might be age range. If you manufacture surfboards, marketing your product to octogenarians might result in very limited success. Your third and final sieve might be income level – the family purchasing a Kia probably occupies a different income bracket than the family purchasing a Lexus .
As you move through these successive filters, you will eventually arrive at a more focused target market for your product. You can experiment with the order of the sieves and different combinations of filters to see whether you receive a different final result. These final groups you arrive at will make it easier to find the sweet spot that is the intersection of “highly interested” and “able to buy.”
C. Emphasize primary value propositions
Who is most likely to be interested in the values your product or service offers? Suppose your company makes a baby stroller that is easy to fold into a compact, portable shape. What types of parents will value it? Perhaps it is those who travel frequently. Maybe you manufacture a DSLR camera that can withstand drops onto hard rock and submersion in water. In this case, your target market might be outdoor enthusiasts who shop at stores such as Patagonia and REI. Whatever your product or service, list out the core values that your product offers, and then draw a line (or lines) to the demographic groups that prioritize these values.
2. Obtain data
Choosing the right markets also means infusing conclusions with objective data. This data might come from a variety of sources. As you work to gather it, here are some guidelines in mind:
A. Gather survey data to identify potential markets
Metrics are a great way to pinpoint promising demographic groups. This might mean conducting surveys via e-mail blasts or newsletters, or you might find it worthwhile to contact a marketing firm that can help you gather preliminary data. Either way, the key is to collect demographic data in your surveys. This can enable you to correlate positive responses to your product or service with specific demographic groups – the same groups that you should later target.
B. Draw on existing data aggressively
If your business offers a product or service similar to those already on the market, do as much homework as possible. What demographic groups are buying these products? When do they buy them? Which specific products in the entire lineup are most popular? There is a plethora of data that you can find online to gather a macro view of the type of customers who are purchasing products similar to what you will offer. You can also build your own micro view of specific types of target customers. Here is one example of basic market research:
Go spend half a day at your local coffee shop. As people place their orders at the counter, take careful notes – what drink did each person buy? How old is each person, and what is his or her gender and ethnicity? Is a particular drink especially popular? When is the store busiest? Once you compile your data, you can then apply the findings to the marketing efforts for your own coffee company.
C. Look to your own network for data
The next time you are with family or friends, look at what products they use. Would they purchase your own product or service? Asking questions as straightforward as, “Would you use this? Do you have a need for this product?” or, “Do you know anyone who would use this?” can provide you with valuable data.
You can also tap into your network of business colleagues, funders, and mentors. Ask them to carefully examine your product or service, maybe even to the extent of trying it for several days or weeks. They might surprise you and think of target markets that you would have never imagined, as well as innovative ways for those groups to use your product.
Whenever possible, draw on diverse perspectives as you build your marketing efforts. Your end goal is to make it easy for your target demographic groups to see connections between their needs and your product. The analysis of multiple streams of data, as well as a continual effort to identify your target customers, can help you achieve this end and maximize your ROI.”
If you would like to view the original article, please visit: www.forbes.com
Course Manuals 1-9
Course Manual 1: Product Offerings
Products Vs Services
A service is an intangible good that results from the labor of one or more people, whereas a product is a tangible good that is placed on the market for purchase, consideration, or consumption. Despite the appearance that the two notions’ tangibility is what sets them apart most, this is not necessarily the case. Services are typically intangible, whereas products are not always physical.
One thing to keep in mind is the close alignment between products and services. In actuality, the majority of items include some sort of service component. For instance, when a customer purchases a car, there are numerous additional service obligations, such as tune-up and maintenance.
However, there is a distinct distinction between the two ideas, and it is crucial to comprehend their practical definitions.
Tangible vs. Intangible
A tangible product’s quality is relatively simple to evaluate. Most products can be counted, touched, and seen, so a customer can judge its durability by looking at it. A nice illustration is when someone is purchasing a home. Every inch of the home, including the attic, basement, foundation, each room, and more, will be examined by the buyer.
A service, on the other hand, cannot be felt or tried out prior to purchase. Let’s say that before making a decision to buy a home, a person needs a professional inspection to find any undiscovered problems. How much knowledge does the inspector have in terms of plumbing, roofing, and other structural issues?
In essence, the client doesn’t have enough information about the inspector’s experience until the job is well under way. The customer can look up internet reviews, inquire about the inspector’s credentials, and request before-and-after images of some of his prior work, but there is no surefire method to gauge the caliber of a service before it is provided.
Production vs. Interaction
Before determining whether to purchase a car, a prospective buyer typically examines the car’s body lines, feels the leather used on the seats, and drives the vehicle for a short distance. The consumer is aware of the precise production line the car came from and that there are numerous others just like it because it is a product. In actuality, the car being purchased is just one among several that are identical.
But what about the support the vehicle dealer offers the car buyer? The way a vehicle salesman engages with one customer differs from the way he engages with another. If the car buyer is fortunate, he might come across a salesperson who is knowledgeable, polite, and open to haggling. If he isn’t, the auto salesman can be one who lacks knowledge or acts carelessly.
Perishable vs. Imperishable
The best approach to explain perishable goods is to think about a restaurant proprietor. Since most fresh goods perish within a few days, if such a person does not comprehend the notion of spoiling and waste reduction, he runs the risk of jeopardizing his business. Technology is yet another illustration. Even intangible items like software eventually become outdated. Products like jewelry and auto parts fall under the category of perishable goods.
But is there a difference between perishable and imperishable in services? Although not imperishable, services can be characterized as perishable. A perishable service is one that is merely transient. In a perfect world, a service like this would be used right away. The service cannot be saved for later use like items can.
Airline flights, auto repairs, theatre entertainment, and manicures are examples of perishable services. If someone buys an airline ticket for a specific day, but then becomes sick and can’t fly, the ticket expires. Some services’ perishable nature makes it challenging to strike a balance between supply and demand.
The Growing Demand for Products and Services
History shows that manufacturers must modify or replace things once they become dated. Think about how paper books have been replaced by websites and e-books, or how CDs have displaced cassette tapes and DVDs. Other times, services have taken the place of particular products.
For instance, many people increasingly prefer streaming services like those provided by entertainment companies like Netflix to DVDs and cable or satellite television shows.
Summary
Products are merely things that are created, kept, moved, promoted, and ultimately sold. Services are intangible, whereas products can either be tangible or intangible. Tangibility, perishability, variety, and heterogeneity are only a few of the elements that contribute to the disparities between goods and services.
Product Analysis
There is no room for guesswork when creating products.
Products that shockingly, yet somehow, perfectly meet the user’s needs are widely available on the market. Additionally, the majority of these deliver on what the company promises, however some utterly fail in this regard.
All of this is the result of product analysis.
Product analysis enables us to fully comprehend the product. Its USP is derived from manufacturing facilities, economic costs, usefulness, services, design, and technology.
In this section of the course manual, let’s understand what product analysis is and why it is necessary to create successful products that will appeal to your target market and therefore accelerate your acquisitive growth from the get-go. By analyzing your product(s) and your acquisition target’s products, you can compare both and decide whether these product offerings align with your strategic aspiration and differentiate you from your competitors.
Let’s get started!
What is Product Analysis?
Product analysis is “the process of gathering, defining, and analyzing data about a product or service to better make decisions.”
You must have a thorough awareness of your target market’s needs in order to develop items that meet those needs.
This is where product analysis comes in.
Through product analysis, you can understand the following about a product:
• The product design
• How it is made
• Its component parts
• The manufacturing process
• The costs involved in making the product
• Its utility and usefulness
• The design of the product
• The technology used in making the product
• The product marketing
• Its unique selling proposition
• Competitive analysis.
You may choose more effectively how to develop and advertise a product if you are aware of all of these factors.
However, product analysis is not just confined to tangible goods. Additionally, it can be used for products, websites, and software or SaaS.
In order to make wise decisions, product analysis seeks to learn as much as possible about a product.
What Is Product Analysis in Design and Technology?
Product analysis encompasses more than simply business and economic aspects.
Additionally, it can be used to product design and technology.
A product designer will employ product analysis to determine how effectively the product satisfies the needs of your customers.
You Can Use Product Analysis To Evaluate Things Like:
• The usability of your product
• The ergonomics of your product
• The aesthetic appeal of your product
• The durability of your product
You may decide how to enhance the user experience and include the needs of the consumer into your plan for acquisitive expansion by being aware of these elements.
Product analysis in technology aids in understanding the viability of your product.
You Can Use It To Assess Things Like:
• How well your product meets customer needs
• The complexity of your product
• The cost of manufacturing your product
• The time it will take to develop and deploy your product
• The demand for the features v/s the capacity of your engineering team.
• The prioritization of certain features over others.
You can decide how to advance the technology of your product by being aware of these elements.
Why Is Product Analysis Necessary?
Let’s examine why product analysis is essential for any product team now that we are aware of what it is.
Product Analysis Is Necessary as It Allows You To Understand the Target Market for Your Product.
If you don’t know what people want, you can’t make anything they’ll want to buy. You can determine your target market’s needs and wants by conducting a product analysis.
For a product to be successful, this is crucial.
Product Analysis Is Also Necessary Because It Allows You To Understand Your Competition.
You must be aware of what your competitors are doing in order to develop a successful product. You can better grasp your competition’s advantages and disadvantages by conducting a product analysis.
Your decisions regarding how to improve their products and get a competitive edge will be aided by this information.
Product Analysis Is Necessary as It Allows You To Understand the Costs Associated With Making and Selling Your Product.
You won’t be able to sell a product for a profit if you don’t know how much it costs to manufacture it. You can better comprehend all of the expenses related to producing and marketing a product by conducting a product analysis.
For pricing and profitability decisions, this information is crucial.
Product Analysis Is Also Necessary Because It Allows You To Understand the Risks Associated With Making and Selling Your Product.
Every new product has some level of risk. To identify and evaluate these risks and develop an informed product strategy, you might use product analysis. Additionally, product analysis is essential for understanding the potential of your product lifetime.
Some products have greater development potential than others because not all items are created equally. You may determine which items have the greatest potential by conducting a product analysis, then decide how to best take advantage of that potential.
These are only a handful of the most crucial justifications for why product analysis is essential. Any product team’s job must include product analysis, thus it must receive the attention it requires.
The ability to assess how successfully your product will compete in the market is one of the most fundamental reasons why product research is important. Competitive product analysis is what this is. We will discuss this in more depth when we get to product analysis techniques. Product owners and managers frequently refer to product analysis by a variety of terms. Other methods assist you in learning more about your product, but they shouldn’t be applied in the same way.
Examining the Difference Between Product Screening and Product Analysis
Finding products that satisfy a specific set of requirements is known as product screening. This could apply to goods with a particular feature, fall within a given price range, or satisfy some other criteria. By screening, you may focus on the goods that have the best chance of being successful and reduce the number of possibilities you have.
Product analysis, on the other hand, is the act of analysing a product to comprehend its advantages and disadvantages. Analysis enables you to comprehend how well a product will satisfy the wants of your customers and what enhancements might be produced.
What Is the Difference Between Customer Analysis and Product Analysis?
Analyzing your target market’s demands and desires involves studying them. Following that, the information is utilized to make decisions about the features and marketing strategy for your product. Product analysis, on the other hand, is the act of analyzing a product to comprehend its advantages and disadvantages.
Analysis enables you to comprehend how well a product will satisfy the wants of your customers and what enhancements might be produced.
As you can see, conducting a product analysis is simply one aspect of creating a successful product. But it’s a crucial component that shouldn’t be disregarded. You must consider both what your clients want and how to give it if you want to develop a product that fits their demands.
Product Analysis Methods
Several product analysis methods help you understand a product in detail.
Here are the most popular product analysis methods to get you started:
1. KJ method
2. SWOT analysis
3. Value chain analysis
4. PESTLE analysis
5. Business model canvas
6. Competitive product analysis
It is crucial to comprehend each in order to decide which approach to take.
KJ Method
A common strategy for understanding a product is the KJ method. It is also referred to as the Affinity Diagram, and product development frequently makes use of it. Information can be arranged using the KJ technique by categorising it, and this can be accomplished by group brainstorming, followed by grouping the material.
The KJ technique has the benefit of assisting in the discovery of patterns and connections between concepts. Additionally, it might assist you in problem-solving.
SWOT Analysis
Another common tool for product analysis is SWOT analysis. The TOWS matrix is another name for it.
SWOT implies Strengths, Weaknesses, Opportunities, and Threats (SWOT).
You can decide what to do next using the SWOT matrix.
It can also assist you in comprehending the strategies used by your rivals.
The benefit of adopting SWOT analysis is that it enables you to comprehend a product by examining both its strengths and weaknesses.
Value Chain Analysis
The value chain analysis method is employed to comprehend the actions taken by a business to add value for its clients. It covers every phase, from purchasing raw materials to giving the consumer the finished product.
The benefit of using this research is that it enables you to identify areas for improvement and the ways in which your business adds value for its clients. The value chain model is another name for this technique.
PESTLE Analysis
Another well-liked tool for product analysis is PESTLE analysis, sometimes referred to as the PESTEL framework. Political, Economic, Social, Technological, Legal, and Environmental elements are often referred to as PESTLE.
This kind of analysis is utilized to comprehend the outside variables that may have an affect on a product. This might assist you in deciding how to get around issues that are outside the scope of your authority.
Business Model Canvas
The business model canvas is a tool for understanding a company’s goods. It serves as a tool for illustrating a business model. The benefit of this is that it makes it easier for you to comprehend how a product functions and what it requires to succeed.
And most importantly, let’s discuss competitive product analysis.
Competitive Product Analysis
Analyzing your competitors’ products to see how effectively they satisfy customer wants is referred to as competitive product analysis.
The goods of the competition can teach you a lot, including:
• What features are included in their product
• How well do those features meet customer needs
• How competitive the pricing is for their product
• What marketing strategies they’re using
• How successful they have been so far
By knowing everything there is to know about your rivals, you can make decisions on how to outperform them in the market by enhancing your own offerings.
Why Is a Competitive Product Analysis Critical?
A competitive product analysis is essential because it enables you to recognize the advantages and disadvantages of your rivals. Your decisions regarding how to improve their products and get a competitive edge will be aided by this information. You must collect information about your competitors’ products in order to conduct a competitive product analysis.
This data can come from various sources:
• Product reviews
• Industry reports
• Company websites
• Social media platforms
• Online forums
• Competitor product packaging
After gathering this information, you must analyze it to determine the main advantages and disadvantages of your competitors’ products.
The next step is to plan how you might take advantage of your rivals’ flaws and outperform their offerings. An analysis of competitive products can be done in a variety of methods. However, ensuring that you are getting correct information about your competitors’ offerings is still crucial. Remember to rely on trustworthy sources while deciding on your product approach.
Each approach of product analysis has distinct benefits that can aid in your understanding of the product. So, which techniques ought you to employ? Actually, it depends on the particular demands and goals you have.
Imagine you’re attempting to identify the overall advantages and disadvantages. SWOT analysis or a business model canvas may be a great place to start in the situation. Consider that you want to know how a product fits into the overall market landscape. PESTLE or competition analysis might be more beneficial in the situation.
When it comes to product analysis, there is no universal solution. It’s crucial to try out several strategies and determine which ones perform best for you and your team. This has all been hypothetical up until now. It is crucial to write down your entire product analysis in the most appropriate format once you have decided which kind of product analysis you will use.
How do you go about doing that?
How To Write a Product Analysis Report
A product analysis report is a written account of a product’s qualities and advantages for the consumer.
The report should have parts that address each of the key facets of the product, and it should be well-structured and simple to read.
An outline of the contents of a product analysis report may be found below:
Title Page
The title of your product analysis is definitely this. For that matter, it’s a simple one.
Table of Contents
The many sections and subsections of your report are all included in this section. It makes it easier for the reader to read the paper and locate the information they need.
Executive Summary
A concise summary of the product analysis report is provided. The most important details, such as the characteristics, advantages, and market opportunity of the product, should be included from each report part.
After the rest of the report has been written, this portion is frequently written last.
Product Analysis Methods
The various techniques utilized to analyze the product should be described in this section.
It must describe the data that was gathered and how it was used to examine the product.
Product Overview and Description
The product should be thoroughly described in this section, along with its features, advantages, and differentiators.
It ought to explain how the product fits into the bigger picture of the market.
How the Product Meets Customer Needs?
How the product satisfies the customer’s needs should be explained in this section.
A description of the intended consumer and details on the needs the product satisfies should be included.
Pricing and Availability
The cost and availability of the product should be disclosed in this section.
This means that you should list the approximate price ranges of the product here along with its best price.
You also mention the location and date of the user’s access to your product.
Also included should be a description of any current or upcoming special offers or discounts.
Marketing Strategies
The various product marketing techniques that were employed to promote the product should be described in this section.
The target market should be described, along with details on how the product will reach them.
The product’s sales and distribution channels should outline the methods used to reach consumers with the product.
Successful Applications of the Product
Examples of how the product has been effectively used in the past or during testing should be included in this section.
Case studies, client reviews, and other types of social proof are examples of what it might contain.
Competitors’ Products and How They Compare
This section ought to give a thorough analysis of the rivals’ offerings and how they stack up against your own.
Information about what the competitor offers and how your product is better (or worse) should be included.
Here, it would be preferable to sum up a SWOT analysis of the opposition.
Recommendations
Recommendations about how to make the product better should be included in this area.
It may also offer suggestions for improving the product’s design and marketing or sales strategies.
Here, you should list any areas that want improvement and offer suggestions for how to address them.
Conclusion
An overview of the product analysis report is given in this section.The most important results from the report should be highlighted, and the appropriate course of action should be described.
It contains information on what was discovered during the product analysis as well as suggestions for future improvements. Phew! That’s a lot of information, right? Why don’t we put this knowledge to good use? Consider a fictitious product analysis example.
Product Analysis Example
You work as a product analyst for a recently released new fitness tracker.
It is your responsibility to give a thorough analysis of the product, outlining both its advantages and disadvantages as well as how it stacks up against competitors.
You must employ a variety of product analysis techniques to do this.
• Data Collection
Data collection is the first stage in every product analysis process.
We will need to gather information about the product itself and how users are utilizing it for our fitness tracker example.
This information can be gathered by conducting surveys, interviews, focus
groups, or even by watching how customers use the product.
• Product Testing
Product testing is a crucial phase in the study of products.
To do this, put the product through a variety of tests to observe how it responds to various situations.
You may examine how well the fitness tracker in our example tracks activity, measures heart rate, and stores data.
You could also check the product’s durability or water resistance.
• Competitive Analysis
Competitive analysis comes next.
You evaluate your product against similar ones at this stage.
You would contrast our fitness tracker example with other trackers available on the market, with health applications, and with wearable technology.
The characteristics that the fitness tracker offers that are not found in other goods would subsequently be described.
• Financial Analysis
Financial analysis is the last stage of the product analysis process.
At this stage, you assess the product’s prospective profitability and production costs.
Consider examining the product’s revenue levels and how they compare to those of competing goods.
Pricing, production, or marketing recommendations can be made using this information.
And presto! You now have it. You’ve completed a product analysis example successfully.
Conclusion
Any product manager who wants to develop or enhance a product must have access to product analysis. It aids in your understanding of the product and how it stacks up against competing goods.
It also aids in pointing up potential areas for product improvement. You can obtain a thorough understanding of the product and its possibilities by employing a variety of techniques. So why are you still waiting? Start your analysis right away!
The Importance Of Aligning Product Portfolio Strategy With Business Strategy
Lack Of Alignment Between Functional Strategies Prevents Business Success
How one or more solutions will satisfy customer wants and carry out business strategy are described in a product strategy. It is simple to confuse a product strategy with new releases, improvements, and services. But many products fall short of their objectives because their product managers don’t establish a product strategy that is related to larger company objectives. A series of tasks will be completed without a clear direction if operational planning is done without a plan in place.
To guarantee that corporate objectives are reached, product strategy, marketing strategy, and sales strategy must all be planned and coordinated. The achievement of the desired growth depends on that alignment. Without it, hopes for market share or how the company will succeed may be naive, and product teams may be unclear about their role in achieving organizational objectives. Additionally, other product teams like product development and user experience are left to craft strategies they believe would be appropriate without understanding the product function strategy.
For instance, when trying to decide whether to spend more in new or existing products to increase capability alignment, product teams may be left wondering how to make investment decisions without knowing the goal portfolio-level capabilities.
Use A Set Of Cascading Decisions Across Three Levels To Align The Organization
Product managers ought to promote alignment within their company. A future competitive advantage can be established and maintained by having a series of cascade decisions that all originate from one point and continue to unite the organization. Organizations ought to achieve the following three levels of alignment:
1. Align with the shared destination. Sales and product leaders should work together to decide how and where the organization will create long-term economic value, along with C-level executives in marketing. A key element of the organization’s overall revenue strategy, this serves as the foundation for product strategy. Product managers need to provide answers to queries about the types of customer needs that are being addressed, the solutions that are needed (such as new goods or services), and whether new offerings are required.
2. Orient product. Product managers may now confirm that the product operating model can carry out the strategy by establishing market-based decisions for the entire product function. This level of product function orientation will direct specific product portfolio investment choices and deliver useful information for product roadmaps. Product leaders should have a broad knowledge of the kinds of offerings needed rather than becoming bogged down in the details of each unique product demand. Questions about how the present portfolio of offerings supports target needs should be addressed, along with any gaps and suggested remedial measures.
3. Provide subfunction coordinates. The product strategy should be reduced by product leaders into guiding principles so that each product team (such as product operations, product platform, and product excellence) can create its own team-level plan. These guidelines maintain the alignment of the entire product function with the destination and orientation levels. Product leaders should specify the crucial success factors that will monitor progress towards strategic goals, explicitly describe the interlocks between teams and stakeholders, and outline the key strategic priorities flowing from past decisions.
Align In-Market Offerings With Overall Business Goals For Key Benefits
The decisions naturally cascade to inform the following set of decisions when organizations complete the three levels in succession. This tactic lessens the amount of discussion and subjectivity that could hinder the process of developing a strategy. Instead of making decisions without considering the facts or the larger context, product executives may then connect portfolio investments with strategic priorities. The three levels of alignment also offer a logical sequence for making choices that make use of pertinent information and feedback at the appropriate time. This method reduces friction and iterations.
A set of strategy components that can be codified on a single page as the result of all decision levels will direct the cross-functional team, support interlock, and ensure that the strategy is comprehensive and easily accessible. As a result, organizations can increase their adaptability and chances of success.
Brands That Changed Product Offerings & Succeeded: Blackberry
BlackBerry: From Mobile Phone Giant To Cybersecurity Specialists
Do you remember BlackBerry? Before the iPhone completely turned the mobile industry on its head, this Canadian brand was one of the industry’s leading names.
Founded in the 1980s as Research In Motion (RIM), the firm was the first wireless data technology company in North America, launching a variety of technology solutions until it gained success with pagers in the 1990s. The first device to incorporate what would become the brand’s iconic QWERTY keyboard was the 850, a two-way pager debuted in 1999 and called BlackBerry due to the keyboard’s similarity to blackberry drupelets.
BlackBerry became a significant mobile phone brand in the 2000s, but it wasn’t until 2006 that it began launching products expressly aimed at consumers – up to that point, it had been mostly focused on selling to companies.
Even after the iPhone debuted in 2007, BlackBerry maintained its market dominance, peaking “in 2010, controlling 43% of the market share” and claiming 80 million users. BlackBerry was extremely popular during this time period, and it was well recognized “for its exceptional security, which made it very popular with business.” US President Barack Obama was known to have one, and pundits attributed it to his progressive image.
However, BlackBerry found it difficult to compete. BlackBerry played catch-up while the iPhone and Samsung both innovated and introduced new ideas to the industry. While it did release touch-screen models, its emphasis “on enterprise over consumer tastes” resulted in phones with fewer features and for which developers did not create apps.
But BlackBerry’s story was far from over…
BlackBerry is still a cybersecurity specialist, as well as a producer of operating systems for automobiles, “air-traffic control, and medical devices.” Indeed, the brand never truly committed to targeting consumers, and while its insistence on enterprise clients hastened its exit from the mobile device market, it has allowed BlackBerry to comfortably pivot back into a brand that serves businesses.
The company had made significant investments in the security of its gadgets and was well-known among consumers for setting the standard in this area. As a result, its metamorphosis into a cybersecurity brand enabled it to transfer many of the associations from its previous life as a phone developer.
Interestingly, despite a complete reversal of its business model, BlackBerry chose not to rebrand, instead preserving the same design and logo that it had when it was the mobile market leader. This is a poignant reminder that rebranding isn’t always necessary. Even if you’re changing as drastically as BlackBerry, as long as you’re depending on the same brand connotations and hope to capitalize on the same emotional connections, you don’t have to ditch your former brand entirely.
Exercise 4.1: Create an advertisement
Course Manual 2: Service Offerings
3 examples of service offerings
Typically, service offerings include ancillary services that are all connected. For instance, the success of commercial, technical, and application services can all rely on one another. Service options are related to the same general service but vary based on factors like opening hours, request response time, or financial impact. Three samples of service offers are provided below so you can learn more about the subject:
1. Business service offerings
Business services are frequently offered by business-to-business (B2B) enterprises to clients to assist in streamlining workflow procedures, managing funds, generating revenue, making profits, allocating resources, and making other wise business decisions. Business services often assist a company in achieving goals and carrying out its organizational mission. A professional services firm can include all of the services it provides to make it simple for customers to research and make purchases from the business. Here are some examples of the kinds of commercial services and products these businesses might offer:
• Financial accounting services: A company may provide a range of specialized services in the financial accounting field, such as general ledger administration, payables and receivables, among others. This can assist a customer in organizing crucial financial and tax papers, allocating money wisely, and abiding by legal requirements.
• Services for business analytics: Business analytics is the process of acquiring, compiling, and analyzing massive amounts of data to produce insightful business information. Clients who want to understand their customer base better and target audiences more successfully may find these services to be helpful.
• Advisory services: When a company offers subject matter specialists to clients for short- or long-term engagements, it is providing advisory services. These professionals evaluate a business issue, offer suggestions and consultation, and strengthen the team.
2. Technical service offerings
Technical services include assistance with software development, information technology, and related tasks. These services can be offered by B2B enterprises to clients to assist them automate operations, gather, organize, and analyze data, enhance customer service, and better manage staff. Backup and recovery, storage, and self-service help desks are a few examples of technical services. Here are some instances of technological services and products that businesses might offer:
• Hosting services: A company may offer basic or sophisticated capabilities in the hosting sector. This can assist companies in maintaining a website that draws visitors, builds brand awareness, and completes other significant marketing and sales objectives.
• Programming services: These are related to hosting websites or other resources and can assist clients in tailoring the software to their unique company requirements. Companies can offer technical support in a range of programming languages and operating systems.
• Email services: These are sophisticated email systems that send email messages in response to consumer requests, comments, or other significant activities. The response time and speed, the time it takes to resolve issues, and the compliance reporting procedures may all be included in various packaging options and tiers of these services.
3. Application service offerings
Applications can be deployed more easily with the help of application services, which a B2B company can offer to a client. A service for an application is not the same as the application itself. Load balancing, application acceleration, auto-scaling, service proxies, and micro-segmentation are a few examples of these services. The following are some examples of application services and products that companies may offer:
• Services for SAP FICO: A business procedure called Statutory Accounting Principles (SAP) and Finance and Controlling (FICO) saves the entirety of a company’s financial transaction data. This aids clients in the creation and management of financial accounts, data analysis, accurate reporting, and the formulation of sound company plans and decisions.
• Technical infrastructure: B2B companies that specialize in technology may offer hardware, operating systems, software, databases, networks, and drivers. Application servers assist organizations in maintaining functional and user-friendly apps over time.
• Application performance monitoring (APM) is the process of tracking crucial application performance indicators with the aid of monitoring tools. This is crucial for assisting clients in data collection and analysis, ensuring system availability, improving user experience, and optimizing performance and responsiveness.
Service offerings vs. projects
Many companies provide their clients with project management services, but there are some significant distinctions between projects and services, including:
Time period
Projects are often a single, point-in-time effort to assist a client in streamlining a procedure, enhancing operational capabilities, or altering a system. A project could entail recruiting a team, installing new software, or developing and implementing a new application. There is a beginning and an end to every undertaking, despite the fact that they might take many different forms. Services, on the other hand, include the ongoing management and optimization of a current process or activity. They employ the service options as long as the company is in operation. For instance, server management enables a client to keep up a strong internet connection.
Measures of success
When an organization completes a project for a client, there are specific, measurable metrics and measurements of success. These often relate to how well the business complies with the project’s goals, objectives, budget, and scope. A project’s success, for instance, may depend on whether it solved a problem while using a limited amount of cash and resources. Customers and businesses evaluate services differently. They track indicators that relate to service performance like quality, cost, demand, and business effect rather than deadlines or budgets. A service that is enhancing its quality is typically successful.
Managers
Project managers are in charge of projects; they oversee the whole process from start to finish. These team captains organize, plan, and supervise the performance of particular duties and activities. Their main objective is usually to finish the project and meet the goals while maintaining the timeline, budget, and scope. Service managers, on the other hand, are in charge of providing services. These individuals often devote a lot more time than project managers to the process and are responsible for overseeing the whole service lifecycle, from launch to retirement.
Tips for improving your service offerings
The best practices for providing and running services in a business vary. The following advice will help you enhance your service offerings so that you can support customers, market your brand, and increase sales:
• Make a precise set of definitions for modelling and reporting on services. For procedures to be improved and brand awareness to be increased, documentation and case studies are crucial.
• Create a service catalogue where you categorize various service offers according to user needs. This will enable you to better communicate your assistance skills to customers and help them choose which packages to buy.
• Integrate data into your service offerings model. To make sure you’re giving audiences the highest value, gather and analyze data on service performance, user needs, and other crucial business areas.
• Establish user roles, and based on those responsibilities, limit access to particular service types. This can help you organize your service offers and make it easier for customers to understand them.
Example of a service package:
Benefits of Creating Service Packages
Of course, there is more to pricing and packaging services than just producing a few packets and attaching a price to them. It takes time and requires knowledge of your target market to decide what to put in your packages.
But if it takes all this time…
Why even bother packaging your services?
Here are seven compelling benefits to creating service packages:
1. Service packages make the intangible, tangible
Services, as opposed to things, are immaterial. Buying services is riskier than buying items since prospects don’t know what they’re getting until they use your service, which is an intangible.
As a result, many potential customers decide not to purchase services.
Fortunately, service packages assist in resolving this issue by giving potential customers something more concrete to support their purchasing choice.
Packages “productize” your service and get rid of objections in the minds of potential customers.
2. They give prospects clarity on your offer
Many HR consultants make the mistake of listing all of their services on their websites and then expecting potential clients to sift through them to find the one they need.
This information just makes it more difficult for people to use your services.
However, packages enable you to present a constrained set of options in a systematic manner, increasing your chances of securing more business.
3. Multiple packages are the perfect upsell
Compared to new customers, your current customers are much more likely to purchase goods and services from you.
When you consider it, it makes sense: They are already familiar with you and have a solid relationship with you.
You must figure out how to upsell to current clients if you want to sell them more services.
One approach to do this is to design service bundles that offer progressively more value at various price points.
Consider having three bundles with the following prices.
• Package 1: £850 / month
• Package 2: £1,500 / month
• Package 3: £2,100 / month
Imagine a client who has chosen Package 1 and has signed up for it as well.
They may be readily persuaded to upgrade if the next level package offers enticing services because they have already used your service and have come to trust you.
4. Prospects don’t compare your services against the competition
When you produce various packages, prospects are more likely to compare them to one another rather than to your rivals.
This is due to the fact that the way consultants package their services makes it intrinsically more difficult to compare them to those of the competition.
The likelihood of obtaining their business is unquestionably increased by this.
5. Your clients have more choice
Giving customers more options when purchasing your services implies offering several price and bundle options.
Additionally, well-organized packages will scale with the same clients.
Consider the time when you subscribe to software, for instance. There are frequently multiple tiers that will appeal to various business sizes.
Many firms choose to upgrade to the next tier of their package as opposed to switching their software as their business expands.
6. You appeal to prospects with different budgets
By providing a variety of packages at various pricing points, you can be sure to appeal to customers with diverse spending limits.
7. They help shift the focus from cost to value
Prospects typically become cost-focused when you give them an itemized cost for services, which might result in price bargaining.
Prospects, however, are less concerned with pricing and more concerned with the value of the full bundle because service packages have a single total cost.
Additionally, *SPOILER ALERT* clients that consider value are prepared to pay far more for your services.
How Amazon Changed their Offerings & Succeeded
Amazon: Online Book Seller To Streaming And Cloud Computing.
Unlike BlackBerry, which modified its product offering in response to failures, Amazon is a brand that has evolved through time and transformed as a result of tremendous success. You might be shocked to learn that the majority of Amazon’s revenue comes from its Amazon Web Service (AWS), which “provides the critical infrastructure for an assortment of applications like data storage and networking”.
But, before we get into the specifics, let’s go back to the beginning.
Amazon began as an online bookseller in 1994, founded by Jeff Bezos. Bezos had seen a paper that predicted the impending explosion of the internet economy and, eager to seize the opportunity, chose books as the foundation for his new eCommerce business.
His book selection was not entirely arbitrary, but was influenced by “the large worldwide market for literature, the low price that could be offered for books, and the tremendous selection of titles that were available in print.”
Amazon grew from here, expanding its product line beyond books in 1998 with the addition of music CDs, toys, gadgets, and tools. Two years later, the business “introduced a new service allowing individual sellers and other outside merchants to peddle their products” alongside their own branded items on the Amazon website.
The company survived the dot-com bust but did not become profitable until the end of 2003 because it continued to focus on expansion. Indeed, Amazon’s strategy and brand identity are defined by expansion.
The company has been fronted by that yellow grinning arrow that connects A to Z since 2000, even before the advent of many of its sub-divisions. Some of these ventures into new products, services, and technologies made sense — for example, the launch of its own e-reader, the Kindle, was a logical step for a brand strongly associated with books, while the Amazon Alexa enabled the brand to integrate its shopping services more seamlessly into consumers’ lives.
But what about developing its own Netflix competitor or cloud computing service? How in the world did that happen?
According to the official line, “a video service in Prime is one more reason for people to stick with Amazon’s membership program” — in other words, it adds value to the overall package and encourages loyalty. However, viewing Amazon Prime Video as merely a bonus does not quite fit. If this is the case, why has the firm spent so much money developing its own shows and movies, even going so far as to create one of the most expensive TV shows of all time in its “Rings Of Power” series?
Some speculate that Amazon will use “ads on Prime Video and its other online video sites to get us interested in new products” that they can sell, allowing them to “encompass the entire life span of shopping, from “Huh, that looks interesting” to clicking buy.
It’s very plausible that the brand’s move into film and television production is merely a passion project of founder Jeff Bezos (or vanity project, depending on your point of view). However, Amazon Web Services, the company’s hugely successful sub-division, arose from a much more natural source.
When Amazon.com released a new feature in 2000 that allowed external merchants to sell from Amazon.com, the company needed “a set of common infrastructure services” to make the entire venture viable, but developers quickly realized the solutions being developed could have broader implications.
An exercise to define the brand’s “core competencies” was carried out at an executive retreat in 2003. “They realized they had also become quite good at running infrastructure services like compute, storage, and database” as part of this process. From this point forward, the key services underlying AWS were steadily created, resulting in what is essentially “an operating system of sorts for the internet.”
Finally, Amazon has been able to reinvent itself numerous times over the years, dipping its fingers into numerous pies while maintaining a single identifiable brand under which all of these sub-divisions reside. Its capacity to do so is due in part to a brand that was developed with expansion in mind and has fearlessly tried to integrate itself more and deeper into the lives of consumers.
Exercise 4.2: Explore your values
Course Manual 3: Talent & Human Capital
To Realize the Full Potential of M&A, Manage the Human Capital
Mergers and acquisitions are being scrutinized in the modern New Economy. Managers, directors, and shareholders are not as enthused about M&A as they once were because so many of them failed to produce the anticipated synergies over the past ten years. Research reveals that human capital issues play a crucial influence in deciding an M&A’s outcome. In this course manual, we offer a number of suggestions for how firms should manage the workforce and leadership aspects in order to build high-performance businesses that fulfill their M&A promises.
In their book, Angel Customers & Demon Customers: Discover Which is Which and Turbocharge Your Stock, Larry Selden and Geoffrey Colvin argue that the success rate of mergers and acquisitions would improve dramatically if more attention were paid to the quality and profitability of the acquired customers.
According to the authors of a June 2003 Harvard Business Review article on the subject, “M&A, like other aspects of running a company, works best when seen as a way to create shareowner value through customers.”
It’s a credible viewpoint, but we’d like to extend that line of thinking further. since the winning formula is to acquire, keep, and develop the most profitable customers and since these customer relationships depend on the employees of the new business, doesn’t it make sense to devote sufficient attention to the “people issues” at the very beginning of the merger process?
Yet, time and again we’ve seen amalgamated organizations flounder as purchased company “stars” quit ship taking their experience and knowledge with them and as mistrust and factionalism cripple the merged workforce. No one is being served – not employees, customers or shareholders – and failure to realize the expected merger synergies is generally the result.
We contend that if a target company’s human capital component were subjected to the same meticulous due diligence as its financial and legal components, early leadership and workforce strategies to promote human collaboration might be created. This would therefore result in the early development of businesses that operate efficiently and meet the expectations of all stakeholders.
Success factors for M&A
The riskiest corporate events are undoubtedly mergers and acquisitions. They offer the opportunity for fantastic synergies and the potential for value-destroying disasters. To ascertain success criteria and best practices, a lot of study has been conducted.
In their extensive research, Rikard Larsson and his colleagues have found that successful M&As are based on strategic business combinations, that is joining companies with related or complementary products or services, and on effecting an organizational integration that identifies and addresses human capital issues.
Employee resistance to change is one of these human concerns that is most prevalent. This resistance is made worse by stress. Merger announcements can be stressful for employees at the target company and, to a lesser extent, the acquirer. If we’re being completely honest, people have good reason to be concerned. It’s almost certain that you will experience career setbacks including job losses, transfers, and downgrades.
Many of these issues, in the opinion of some business leaders, can be resolved by merging businesses with similar cultures. It’s not really that easy. For merged businesses to fulfill their potential, neither the choice of strategic business combinations nor cultural/human resource elements alone appear to be adequate. According to Larsson’s research, the strategic business component is essential, but how fully its potential is realized depends on the integration process.
Make no mistake. Balance sheets, information systems, truck fleets, production facilities, and office buildings are only a small part of integration. It also concerns people. It’s about assisting them in handling and accepting change so they can concentrate on the crucial task of building a company that satisfies them, their clients, and their shareholders.
Integration Styles
Two popular methods of integration have emerged during the past few decades: soft/avoiding and hard/controlling. In the soft method, organizational integration is mainly placed “on hold” in the hope that it would happen naturally as workers gain each other’s trust. Employee resistance is reduced, but so are the benefits of starting the integration process right away.
In the harsh approach, the acquirer quickly implements the operating model to crush opposition and cultural conflicts. Decisive action eliminates uncertainty and does not impede momentum, according to this theory. This swiftly starts the integration process, but employee opposition skyrockets.
According to research, there is a third, co-competence strategy, which is a more successful integration model. Both sides must recognize and value one another’s advantages, and they must work together on integration initiatives that best utilize each other’s skills. Although co-competence isn’t always simple, it excels at addressing the issue of employee resistance, which therefore makes it possible for the integration process to move forward successfully.
The co-competence method addresses significant organizational model difficulties that are sometimes underappreciated in terms of the intricacies thanks to its substantial human capital component. For instance, Randy Stott of the Senn-Delaney Leadership Consulting Group has discovered that various business operational systems call for various leadership philosophies. This is not a revelation in and of itself, but Stott gives it a fresh spin.
According to Stott, there are two common operating models: the holding company, which has a portfolio of independent businesses (such as General Electric Company), and the integrated firm, which has a unified strategy applied to all businesses (such as Kellogg firm). The “allied” model, he continues, is a third paradigm in which business units have their own strategy but collaborate on non-core tasks. All three of these organizations can benefit from different types of effective leadership actions.
A seamless integration can be greatly aided by identifying these discrepancies early on using the co-competence integration approach and then making the future operating model explicit. It is obvious that how quickly personnel decisions are made during a merger is critical. Prompt management announcements help employees, vendors, and customers feel less insecure, which speeds up the process of getting back to business as usual. However, how can the task of identifying employee strengths, limitations, and motivations—which is essential to the co-competence integration approach—be done when time is of the essence?
Research in the behavioral sciences and, to some extent, technology now give businesses a workable way to deal with those challenging “people issues,” such as employee resistance, greatly increasing their chances of realizing – and possibly even exceeding – the potential advantages of starting a new company.
Companies that prioritize the ‘people side’: Hyatt Hotel Group
The high turnover rate that hotels are known for can swiftly deplete institutional expertise and revenues. (Hiring and training new personnel every month is pretty expensive!) By investing in employee development programs and hiring internally, Hyatt aims to reduce turnover so that team members always feel like they have room to advance in their careers. The hotel chain provides its staff with excellent travel benefits and unrestricted tuition reimbursement.
Companies that prioritize the ‘people side’: Google
Employee perks like free meals, in-house massages, and employee shuttles are well known at Google and other Silicon Valley behemoths. Perks are good, but they don’t necessarily have an effect on how motivated employees are. Google takes a step further by enabling staff members to work on own projects for 20% of their time. This 20% program not only offers employees a staggering degree of autonomy, but it also helped Google develop some of its most valuable services, such as AdSense, Gmail, and Google Maps.
Human Capital Retention In The Great Resignation Era
One of the top goals for organizations in the upcoming year is employee retention. This problem has received a lot of press attention and is the subject of leadership’s intense emphasis. Headline-grabbing phrases like “the great resignation” have been utilized to generate interest.
Perhaps boards should change the narrative and view the shift in the workforce as the “great reassessment” instead of the “great resignation”.
Employees want to work for an organization that shares their values and gives them a feeling of purpose more than ever before as they reevaluate their priorities and values in great detail.
Boards and leadership teams need to have a strategy in place as the battle for talent intensifies.
During a period of acquisitive growth, boards and executive teams might consider executing the following “tactical” action items.
We can try to reconnect with our employees by giving them the chance to advance their careers and develop their skills. We can also come up with some opportunities for continuous learning by developing an online curriculum and, most importantly, by recognizing and rewarding the continuous learners. The learning opportunities should be connected to the business purpose for the industry of the organization, such as digital transformation, where employees develop skills that are important for the next generation of businesses.
The fact that your workforce is thinking about how they really want to spend their time, what skills and talents they have, and how they want the next phase of their career to look is another significant opportunity to take into account as your workforce begins the transition back to in-person work, either full time or in a hybrid environment. Many people have experienced dissatisfaction over matters outside of their control, such as their inability to travel, desire to work from home, or necessity to go back to the workplace. There is now a demand for change in other areas as a result of people feeling out of control in some aspects of their lives. This, in my opinion, has contributed to the dramatic change in the workforce.
Making internal hiring a priority before looking for external applicants is one method to address the need for change that some employees feel (without losing your most skilled employees). Request from your supervisors that their teams consider internal mobility. Make it easy and convenient for your employees to apply for new job openings at your business. During a merger or acquisition, your employees’ demand for change can be satisfied and they can develop a stronger bond with the business by taking on new positions and learning new skills.
What is the company’s overarching value proposition to attract and keep talent? is a conversation that boards may want to undertake at a high level. What particular plans does the business have to promote employee retention?
Is there a method to analyze your staff population in a more granular / segmented approach rather than reacting to an unhappy employee base? Don’t take an all-encompassing approach to your employee base. Consider micro-segmenting your staff into various groups or teams utilizing a conventional consumer technique. For instance, it’s possible that particular functional groups or geographic areas are more susceptible and require earlier attention from career pathing.
Some of your employees are there because they want career paths, while others are just looking for part-time work. Consider it and evaluate it using different criteria, such as interests, drives, demographics, generations, etc. These various groups will each respond differently to and value various incentives.
Employee surveys are valuable and crucial, so do not undervalue them. Analyze the results of your employee survey to find any potential issues that may arise in the future. The likelihood that they will still be working for the company in 18 months and their desire to recommend the company to a friend are common inquiries that are good indicators of employee morale. According to anecdotal evidence, up to 75% of your workforce base could potentially be open to a job offer at any time. This is why creating a strong bond between employees and the company’s principles and culture is so important and can prevent your business from having a high turnover rate.
Compensation structures are another aspect that boards and executive teams should address. Everyone is aware of the extreme high turnover and severe burnout that are occurring in tech businesses. For crucial tech teams, many remuneration models are already in use.
Boards should consider the critical positions that the firm “must have” to stay competitive. In other words, if the company can’t attract and keep this group of individuals, it won’t succeed. Recognize which of your assets are most valuable. Consider them in a different way. Determine which positions you must truly overpay for, then make generous offers.
The board and management should talk about how much time is spent on the top 100 employees who report directly to the CEO at this pivotal time. Ask your leadership team to describe how they are creating career paths and letting this important group know how leadership views their future contributions.
Never undervalue the crucial role that middle management and your front-line employees play. Employees that are internal influencers have a significant impact on their coworkers at every level of a business. When you lose these personnel, there will often be a disproportionate domino effect fallout because they are typically your employees that are most eager and dedicated.
Suggest that your leadership team interact specifically with the managers who report to them so that they can identify the most powerful individuals who could be able to start a mass exodus.
Ensure that all employees, regardless of level, are completely aware of the benefits offered and their compensation packages.
As you move deeper into the company, it becomes increasingly common for employees to be unaware of all the benefits of their contracts. You should expect that your employees are potentially being hired, contacted frequently, and shown compensation proposals from competitors that, at first glance, might seem alluring. Make sure you reiterate all the benefits included in their current total compensation and benefit package.
Look at empowering your leadership at the lower levels where frontline and second line managers have a tiny amount of cash they can utilize to reward, acknowledge, and retain staff members in this crucial moment for talent retention. Give your managers the most flexibility possible to identify and recognize top performers. Giving your management staff more authority will help them stay on board and stay motivated. It has becoming more successful at boosting employee morale to reduce the amount of decision-making you make by offering freedom within previously established boundaries.
Compared to a tiny wage raise that is quickly forgotten, an unexpected bonus is frequently more exciting and can immediately enhance an employee’s current situation. Employees must feel that management values and honors their essential contributions and excellent work.
In order to attract and keep the greatest personnel, boards should debate human capital retention strategies with management and come up with unique, novel solutions. You don’t want to run the risk of being understaffed at a crucial period of business expansion or rising client demand.
How To Prioritize Human Capital in M&A Due Diligence
Acquisitions and mergers are complicated. It takes careful consideration to assess and decide how two firms will merge to produce one successful venture. This entails looking at everything from business plans to intellectual property to financial records.
However, one aspect of potential enterprises frequently falls to the wayside throughout this meticulous procedure. People.
The most crucial resource for any firm is its people, or human capital. They are also the most difficult, which, regrettably, leads to many failed M&A transactions.
Where Does Human Capital Fit In The Due Diligence Process?
It goes beyond simply reviewing financial accounts and estimates to conduct due diligence. It’s important to have a firm grasp of the company model. You should be able to quantify any possible synergies, scalability, and operational efficiency resulting from the M&A acquisition at the conclusion of the process.
The crucial word here is “measure.” Financial statements, intellectual property, and inventory are a few examples of things that offer quantifiable information that easily translates into monetary value. Data on experiences, talents, and proficiencies, however, have historically been more ambiguous and challenging to assign a precise value to.
Modern systems can instantly baseline a person’s human capital assets, including their hard and soft skills and professional experiences, using real-time data that is displayed in an impactful visual manner.
Here is how you can use these technologies to generate quantifiable skill data that will help your valuation.
Add Skills Data To The Data Room
Buyers and advisors do due diligence in two places. both in-person and in the data room.
The on-site visit has historically been used to assess culture, environment, business management, and labor. Nearly all of the human capital due diligence is done on-site.
Human capital is not regarded as fundamental business data because on-site visits are typically the last stage in the appraisal process.
In the data room, provide skill data for all workforces. A current skills inventory that gives correct skill information on all workforce members should be created by both sides. The worth of technological assets, new goods and services, and operational effectiveness can all be informed by this data.
Leverage Skills Data to Evaluate Post-Merger Synergies
Cultural synergy are only one factor; human capital is another. Technology, expenses, performance, and so much more are all influenced by the talents and abilities of your future employees, as we just discussed.
Why? Because people execute the business strategy.
Critical skill gaps that endanger the viability of post-merger synergies can be revealed by evaluating skills data throughout the due diligence process.
For instance, Company A is interested in buying Company B, a small startup, in order to benefit from its distinct cloud-based technologies. With the help of the technology, Company A will be able to enter new product markets and boost system productivity by 200%. According to conventional data, purchasing Company B is a wise strategic move with long-term financial advantages.
Let’s nevertheless now incorporate current skill information into Company A’s due diligence. It turns out that Company A’s personnel lacks the necessary skills to combine their current systems with Company B’s cloud-based technologies after employing data visualizations to make it simple to understand the results.
Buyers can proactively assess how each workforce will affect post-merger synergies and the overall valuation of the M&A deal if skills data is included in due diligence. As a result, they will save themselves from high expenses, inefficiencies, and perhaps even a failed transaction.
Your ultimate objective is to “don’t leave money on the table.” Since M&A deals are already complicated, buyers are taking a big risk. The success of the deal over the long run determines true earnings. Therefore, to reduce this risk and position your M&A deal for post-transaction success, every element should be assessed based on quantifiable, actionable facts.
Companies that prioritize the ‘people side’: Virgin Group
Virgin Group CEO Sir Richard Branson has made it a priority to instill a people-first attitude throughout his organization from the very beginning. According to a Forbes article, Branson is so committed to creating a positive culture at Virgin that when he devised a formula for selecting leaders in his company, he insisted that they meet the following criteria:
• “Praise employees instead of criticizing them”
• “Genuinely love all people from the cleaning lady to the senior executives”
• “Be a great listener who not only hears the recommendations from employees but acts upon them”
It’s not surprising that LinkedIn ranked Virgin as the seventh-best firm to work for in 2017.
Companies that prioritize the ‘people side’: CarMax
The largest used automobile reseller in the country, CarMax, developed a solid reputation based on trust and honesty. These qualities go beyond just being customer-focused. According to excellent Place to Work, an astounding 87% of CarMax employees think the company is an excellent place to work.
One of the business’s “core values,” which it upholds, is putting people first. 94% of employees “feel good about the ways we contribute to the community,” 95% of employees say they were welcomed when they joined the company, and 90% of employees say CarMax management is honest and ethical.
Exercise 4.3: Life’s Best Moments
1. Instruct your team to spend a few minutes contemplating the best moments of their lives.
2. Then ask them to decide which 30 seconds of their life they would relive again if they had the chance.
3. Now, ask each team member to share their memory out loud.
Course Manual 4: Transferable Capabilities
Categories of Company Capabilities:
There are several categories of enterprise business capabilities.
Strategic Capabilities:
The organization can stand out from the competition because to its strategic competencies. These may be new capabilities that a corporation needs to develop or existing capabilities that need to be upgraded. For instance, having strong “Corporate Development” and “Merger Integration” competencies is crucial for companies starting their inorganic expansion. On the other hand, “Supply Chain Networks” may be a crucial aspect for manufacturing organizations. Digital skills could mean the difference between a person merely surviving and one who thrives.
Core Capabilities: The company’s core competencies are those that are necessary to its continued existence. For multi-brand businesses like Procter & Gamble or Unilever, for instance, a competency like “Product Management” is essential to their existence. On the other hand, “Design and Industrial Engineering” are important competencies for a business like Sharper Image. Furthermore, “Recruitment” and “Training” are key competencies for businesses that provide professional services.
Context Capabilities: Contextual talents are crucial for a company’s ability to function. The transactional services that make up the context capabilities are often invisible but become apparent when they are ineffective. For the majority of businesses, context capabilities like finance and accounting come into play. When a gap or a compliance issue exists, this capability becomes problematic. For instance, organizations become candidates for transformation when they seek to enhance and cut down on the amount of time needed for the “Close Process” or when a regulatory body damages their brand. (There are, of course, exceptions in which businesses use finance and accounting as a strategic difference.)
Foundational or Commodity Capabilities: All other skills that are required for the operation of the business but don’t add much value may be classified as Foundational or Commodity skills. Lowering operating costs is the key approach for core or commodity capabilities, making standardization and business process outsourcing powerful optimization tools. For instance, “Accounts Payable” could be a commodity capability, where the value-add is in lowering the cost and keeping the operation stable.
Sometimes a business will turn a situational competence into a core or strategic capability. For instance, distribution and warehousing were previously considered peripheral competencies for the majority of retail organizations, but Walmart and, more recently, Amazon, have made this a core competency.
Similar to how “Design” was one of the functions in most businesses, Design is a strategic competence for Apple and a pillar of its phenomenal success thanks to the leadership of Jonny Ive and the vision of Steve Jobs.
As long as a company is expanding, it is still viable. For every business leader, predicting how much the company will grow over the course of a year or another time frame is a challenging task. The leaders also find it difficult to picture the following scenarios:
• How much growth is necessary for their business?
• Should we settle for revenue growth or margin improvement? How do we balance both?
• How to actually achieve growth?
A Capabilities-driven Strategy (CDS), rather than the traditional market-driven approaches, focused on everything that customers want, is required for sustainable success.
Utilizing all available means, such as current or adjacent markets, organic channels (such as marketing or innovation), or inorganic techniques (such as mergers and acquisitions), the capabilities-driven growth strategy calls for capitalizing on the organization’s current strengths.
As long as all methods are combined in an agile manner and are in line with the firm’s current competencies and competitive advantages, the capabilities-driven strategy enables leaders to accomplish growth. Prior to its execution, an effective capabilities-driven growth strategy requires the organizations to define three key factors:
• An assortment of product or service offerings
• A unique capabilities system, which competitors can’t imitate
• A value proposition reverberating with what customers need
Organizations should be able to turn ideas into a solid position, with a workable business model that can generate income and profits over the long haul.
Companies that want to compete in new business categories need to have a clear strategy for how they will create value as well as the necessary resources. Senior executives should then create a route to achieve lucrative long-term development by fusing together 4 methods to Growth Strategy once an organisation has acquired a position of strength to compete, i.e., a Capabilities-driven Strategy and the means to
take advantage of it.
1. In-market Opportunities
2. Near-market Opportunities
3. Disruptive Opportunities
4. Capability Development
Although it is frequently overlooked, the interaction between these 4 strategies is essential for success. It facilitates the creation of a cycle of ongoing progress.
Let’s examine the first two Capabilities-driven Growth Strategy strategies in more detail.
In-market Opportunities
The first strategy for growth comprises taking full advantage of the current market’s potential. Leaders frequently overlook potential expansion opportunities in their current markets. Potential in other industries and foreign markets draws them in. A sensible strategy would be to thoroughly examine the current markets with a fresh perspective first and uncover new business opportunities before expanding into other industries and markets. Three crucial steps must be taken in order to estimate the size of these untapped potential in the current markets, namely:
• Identify gaps between customers’ requirements and products/services available in the market and bridge that gap with new or improved offerings.
• Ascertain elements to influence customers to shift to those new offerings—e.g. attributes, benefits, and communication.
• Build, improve, reorganize, or divert your distinct organizational capabilities to bridge the gap and encourage customers to shift.
For instance, by adding premium coffee, dessert, or drinks to their standard breakfast or lunch menus, fast-food restaurants might increase growth potential in their current market. By expanding their menus, providing meals, and convincing consumers to switch to them, coffee shops, juice bars, and similar businesses may otherwise collect this additional money.
Near-market Opportunities
It is usual for businesses to consider the local market when considering expansion. Although they appear appealing, these adjacent markets are actually being developed by other businesses utilizing complex methods that are difficult to imitate. Therefore, you should proceed with extreme caution while deciding to increase your capabilities in the nearby markets.
A thorough assessment of an organization’s skills and fit for surrounding markets, such as cost reduction, operational strengths, IT infrastructure and systems, supply chain, or customer data, should come before any attempts to grow into adjacent markets or into other industries. They need to narrow down the markets in which they can apply their special capabilities, find new clients for their current products, or develop new products based on those strengths.
Want an M&A win? Make sure it’s a capabilities fit
Successful negotiations are frequently fueled by specific characteristics, such tools, technology, and skills that add value, according to a PwC study of 800 deals.
How do business owners close M&A deals? How can they make sure that their investments in resources—which are frequently made at a premium to market value—produce long-term value and shareholder return? Pay close attention to your abilities.
According to a PwC research of 800 transactions, including the 50 largest acquisitions in 16 industries over the past ten years, a strategy based on skills is a key differentiator in transactions. These particular arrangements of procedures, devices, know-how, competencies, and behaviors enable businesses to offer distinctive value to clients.
In terms of total shareholder returns (TSR), the study indicated that capabilities-driven deals outperformed the local market index by an average of 3.3 percentage points. Limited-fit deals, on the other hand, underperformed the local market index by 10.9 percentage points annually.
The result? Instead of attempting to turn around a merger or acquisition that doesn’t make sense from a capabilities perspective, safeguard value and management bandwidth by departing it immediately. Likewise, if there is a capability gap, close it right away to avoid falling behind in the race for victory.
Integration: Why Less Is More in Capability Deals
Capability deals continue to rise in prominence, yet we are early on the experience curve
As more businesses opt to purchase rather than develop new capabilities, capability-driven deals have increased in number within scope deals and currently account for 20% of all major agreements globally (see image below).
Capability purchases are distinct from more typical growth scope deals, which entail purchasing businesses with quickly expanding products or in rapidly expanding markets in order to boost growth right away. In capability acquisitions, the complementary competencies of the acquirer and target are combined to create a new value proposition or a new product in order to spur future growth. That value generation is more difficult to measure than either scale-related cost synergies or growth-related revenue synergies.
There are three types of capability deals that we can identify: those that strive to bolster an already-existing competitive advantage; those that focus on digital potential; and those that seek to reshape a firm through cross-sector or cross-value chain moves. Let’s examine each of these justifications in turn.
Examples of the first kind include the $16.3 billion purchase of Tableau by Salesforce, which allowed Salesforce to improve the analytics capabilities of its customer relationship management product by utilizing Tableau’s data visualization platform. In order to build the capacity to offer data-driven advertising services, Publicis Groupe acquired Epsilon Data Management in the media sector.
The acquisition of digital capabilities in developing fields like robotics, artificial intelligence, e-commerce, the Internet of Things, and big data analytics constitutes the second important form of capability purchase. Johnson & Johnson purchased Auris Health in order to take use of its robotic platform technology, which is being utilized in diagnostic and therapeutic operations relating to the lung. The tyre manufacturer Bridgestone acquired TomTom’s telematics fleet management business in order to position itself as a significant player in the expanding mobility-as-a-service sector. A consumer goods firm called Edgewell Personal Care purchased Harry’s, known for its subscription-based online sales of shaving and other grooming items, in order to target the continued expansion of e-commerce.
In order to redefine the combined business, certain companies are integrating their talents. The aerospace and defense industry’s Raytheon acquisition by United Technologies, which integrates skills in commercial airplanes, missile systems, and defense systems, is an example of a cross-value chain and cross-sector agreement.
These deals nevertheless aren’t extremely typical despite the capabilities dealmaking’s increasing growth. In a recent study of senior executives, between 70 and 80 percent of those polled said they had experience with deals that were growth- and scale-oriented, but only about 50 percent said they had completed capabilities deals.
This is a different breed of M&A
Recognizing that capacity agreements are different from what the majority of acquirers may have done and experienced in the past is the first step towards success. Deals involving capabilities differ in two important ways: the traits of the target company itself and the mechanisms for value development.
Target assets in capability acquisitions are typically smaller, more entrepreneurial, and have an Agile working culture, i.e., completely different from the acquirer’s methods of operation. The people who have specialized knowledge of the technology, R&D capability, or consumer insights—information that the acquirer does not currently have—are what make the target valuable.
Second, compared to agreements involving scale and growth scope, the value of capabilities deals is less clear and perceptible. Scale deals are most valuable when there are cost synergies, while growth scope deals are most valuable when there are revenue synergies. The value in capability deals comes from introducing novel value propositions or new products with the potential for expansion in the future.
Value is created at the intersection of the complementary capabilities that the target and the acquirer each bring to the table. While the target’s capabilities offer a future-back picture of what might be, the acquirer’s business model depicts the industry’s business model as it is today. Both must work together to realize that vision. Consider this statement made by Marc Benioff, founder and CEO of Salesforce, on the acquisition of Tableau: Tableau wanted our shares rather than our money because they understood that the real value in this situation lay in the company that we are building together.
Even the most seasoned acquirers find this to be unfamiliar ground. An early measure of success or failure is the level of due diligence on the solo asset (see below image).
Many buyers adopt the cautious stance of delaying asset integration for the first several years. This is a simple but inefficient fix. Once the cement has set, it is difficult to begin integration because no value is produced. The best purchasers behave properly when the cement is still wet.
Fulfilling the promise of the deal—joint growth planning and fostering collaboration
Successful capability acquirers are aware that their tried-and-true integration playbooks are insufficient. It requires adopting the appropriate attitude by continuing to be open to learning from the smaller goal and guaranteeing an equal voice for the target leadership.
Under CEO Satya Nadella, Microsoft started a series of capabilities deals, and culture openness and reinvention was a crucial facilitator for deal success. Chris Capossela, the business’s chief marketing officer, described how the company transitioned from a “know-it-all” culture to a “learn-it-all” culture and added that “everything we do now is rooted in a growth mindset.” CEO Satya Nadella stated: “Longevity in this business is about being able to reinvent yourself or invent the future.” In fact, the underlying conviction that the company required these new skills to thrive was what drove this transition.
Additionally, effective acquirers consciously push collaboration from the start. They develop their teamwork skills in this way. It entails taking the necessary time to get to know one another, aligning the top leadership on the shared future goal, and establishing ground rules.
For all deal types, a few concrete measures must be taken prior to deal close, such as shutting the books, consolidating financial reporting, and informing staff members and other stakeholders. These behaviors are unrelated to integration or a lack thereof.
However, the value isn’t there. Three things are done correctly by successful acquirers during capability integrations.
• Develop a value-creation plan jointly with the target leadership.
• Protect the target’s talent, culture and ways of working, and find ways to scale it to support the value-creation plan.
• Consider operating model changes in support of the value-creation plan—both hard and soft tactics to get the teams to work together.
When integrating capability deals, value creation takes the lead over functional integration. The underlying worth is in the revenue potential given the valuation multiples at play. You run the danger of spending precious and constrained managerial bandwidth on things that don’t matter if you pursue insignificant cost synergies. That represents a lost chance.
Setting the proper mood is most effective just before and immediately after deal close. Successful acquirers assemble the appropriate personnel, begin by adopting a future-back perspective of the client, construct the product/service proposition in service of the demands of the customer, and utilize it to inform decisions about where to establish connections. If there is any functional integration, it would be a byproduct. In fact, if functional integration is necessary, it might not even be possible when the product or service is ready for launch.
Consider the example of an animal nutrition firm (AgriCo) that bought a small, rapidly expanding manufacturer of natural animal feed additives (FeedCo) to illustrate how this strategy works in practice. In order to establish industry-leading skills and all-natural solutions for animal health and food safety, the acquisition was designed to accelerate combined growth.
This agreement covered both the growth scope and capabilities scope. With its own products and technology, FeedCo serves the animal nutrition market’s faster-growing natural solutions category. AgriCo had to develop a strategic strategy to realise the transaction concept due to the respective sizes of the firms (AgriCo was far larger than FeedCo) and the necessity to safeguard and accelerate FeedCo’s growth.
In many aspects, this integration strategy was distinct from a conventional one.
The target leadership and the acquirer collaborated to design a value-creation plan:
• Early collaborative meetings concentrated on information sharing and learning, delaying opportunity brainstorming and implementation planning.
– The target leadership led and controlled the value-creation plan, and the acquirer leadership supported it.
– The value-creation plan was converted into an action plan, which included go-to-market and product development efforts as well as the enablers needed to take action.
• The acquirer safeguarded the target’s expertise, culture, and working practices:
– AgriCo made an effort to establish ties and accepted the new leadership team on an equal footing.
– To ensure a concentrated focus, HR onboarding initiatives were managed separately from people-first priorities including engagement and retention programs.
• To insulate the target management from direct inquiries from the acquirer side, gatekeepers were initially established.
• In order to support the value-creation objective, the acquirer thought about changing the operational model:
• Functional integration was kept to a minimum and limited to what was necessary for mission-critical operations. They also adopted a “how can we help you?” stance, which helped to set the tone for early inclusion. Joint growth teams were established to bring the relevant individuals from both sides together with the proper governance to ensure the growth plan was successfully implemented.
This integration strategy allowed AgriCo and FeedCo to collaborate on a five-year growth plan to quadruple FeedCo’s revenue while ensuring the full retention of key FeedCo staff.
A goal without a plan is only a dream, so the saying goes. Successful acquirers actively translate the acquisition thesis into an action strategy before beginning capability deals. They take advantage of a capabilities deal’s enormous potential to transform their business and outperform rivals.
Exercise 4.4: Simulated Problems
Course Manual 5: Channels to Market
Marketing channels are instruments used by marketers to establish a relationship between a producer or business and a group of potential clients. Professionals may manage sales and create an efficient marketing plan for their company through a range of different channels. Each channel could have a particular function, such as spreading knowledge about a new product or creating a stronger sense of brand identification. Each form of marketing channel typically fits into one of these categories:
Communication
These marketing avenues function to convey a certain message to a target market. For instance, as it conveys a specific message to the recipients, the content of a promotional email is a feature of a communication marketing channel.
Distribution
These channels stand for the routes that the product takes to reach the buyer. Distribution marketing includes things like the packaging that a business employs to ship its goods to clients.
Service
The completion of business transactions is one of these marketing channels. For instance, service marketing channels are the means by which a business is paid for its goods.
Different Types of Marketing Channels
Marketing experts engage with prospective clients about their goods and services through a variety of media. There are many different marketing channels, from distribution methods to communication channels.
We describe marketing channels and offer a list of nine that you can use in your marketing plan in this course manual.
What is a marketing channel?
Marketing channels are tools that marketers use to build a connection between a manufacturer or company to a group of potential customers. There are a variety of different channels that help professionals manage sales and develop an effective marketing strategy for their business. Each channel may serve a different purpose such as building a brand identity or communicating information about a new product. Typically, each type of marketing channel may be one of these:
Communication
These marketing channels work to deliver a particular message to a target audience. For example, the content included in a promotional email is a facet of a communication marketing channel since it provides a specific message to the recipients.
Distribution
These channels represent the methods through which the product arrives at the customer. For example, the packaging that a company uses to ship its products to customers is a type of distribution marketing.
Service
These marketing channels include finalizing business transactions. For example, the methods through which a company receives payment for their products are service marketing channels.
9 types of marketing channels
To successfully appeal to their target audience, professionals might employ a range of marketing methods. These channels include, among others:
1. Direct selling
In the direct selling marketing channel, a professional interacts directly with potential customers. These conversations typically take place one at a time and could be most effective for smaller businesses. People you know are frequently the target audience for direct selling. Due to the fact that you won’t have to pay for advertising space, distribution fees, or other sorts of marketing materials, this marketing channel may result in lower costs for the company. You might see a bigger overall profit from a successful product sale as a result of these decreased expenditures. This is a route for marketing and communication.
2. Catalog direct
When a potential consumer uses the catalog direct marketing channel, they peruse a physical or online catalog. Prices, descriptions of the products, or pictures of the options may be included in a catalog. After choosing their desired goods from the catalog, the visitor places an order. Through this method, face-to-face communication with potential customers may not be necessary. Additionally, it gives the customer a variety of possibilities from which to choose. If you sell a variety of products and want to provide the buyer some options, the catalog direct approach might be effective. This is a route for marketing and communication.
3. Network marketing
Network marketing is a channel where sellers leverage their personal networks to produce sales, much like direct selling. As an illustration, people might promote a product on their personal social media to let their loved ones know about it. Through information, images, or your personal testimonial of the product’s usefulness, this kind of marketing channel focuses on educating consumers about the product and making a sale to them directly. Another example of a communication marketing channel is networking marketing.
4. Value-added resale
This marketing channel might buy a product, improve it, and then sell it again to its intended market. For instance, if a business sells customized bookcases, it can buy readymade bookcases from a wholesaler before modifying each one to suit a client’s requirements. The corporation can sell its products as distinctive, valuable, and desired to the buyer by adding value to the original product. Given that it has to do with how the product appears to clients, this marketing channel is distributive.
5. Digital advertisements
You could use a range of digital platforms in this communication and marketing channel to advertise your goods or services. Your business may use a website to market to a specific target while selling things there. The use of your own social media platforms to promote to a target audience or the purchase of advertising space on other websites or social media platforms are examples of various digital advertisement channels. Digital marketing could cost your company money depending on the precise strategy you adopt. This marketing strategy is well-known and quite successful.
6. Events
Events can act as a channel for marketing since they give businesses the chance to interact with potential clients in novel settings. You might put on a gathering with a clear objective, like marketing a brand-new product line. It’s crucial to make sure that these gatherings give customers the chance to learn more about the product, appreciate its worth, and perhaps even make a purchase. Marketing is necessary for the events itself so that people are aware of the venue, start time, and other event specifics. Since attendees may decide to buy a product, marketing events serve as both a communication and distribution route.
7. SEO marketing
Search engine optimization, or SEO, describes the outcomes that a potential customer sees when they conduct an online search. The search engine results page should be optimized because it can increase visitors to your company’s website as a marketing channel. The particular SEO marketing methods you choose to use will depend on your target market, your offering, and your desired sales results.
8. Email marketing
Email marketing is a different kind of communication marketing channel. Promotional emails that are addressed to a particular audience and contain a specific message are referred to as this channel. An approaching sale, the launch of a new product, or modifications to an existing product may all be mentioned in a marketing email. Businesses can use email marketing to spread specialized content across a variety of messages, creating special chances for marketing specialists.
9. Indirect marketing
Indirect marketing uses a variety of methods to reach customers in an efficient manner. In contrast to direct marketing, which involves a producer selling to a customer directly, indirect marketing involves a number of participants. A manufacturer might sell to a merchant as an illustration. The goods is then displayed by the merchant in their store, where a buyer sees it and chooses to buy it.
How restricted access to sales channels can act as a barrier to entry
For all businesses, getting your products to market is crucial. It can also be a significant barrier to entry; if you have trouble getting your items distributed despite the fact that other businesses already have them, you may find it difficult to expand. This article examines entrance barriers caused by distribution channel access and suggests solutions.
How access to sales channels impacts barriers to entry
A significant barrier to entry for new businesses might be having your products carried by important merchants. It can be challenging to persuade shops to carry your products, and if you are unable to get your products in front of potential clients, you will find it extremely difficult to generate sales.
Retailers may be reluctant to carry a new company’s products for a variety of reasons, some of which are as follows:
Lack of track record
Retailers could be hesitant to stock your products as a new company because neither your products nor your company may have a history of offering product support.
Existing products stocked on the shelves
Retailers may be hesitant to take a new company’s items without a compelling rationale because they already have products from other companies stored and ready to sell.
The retailers’ customers may demand the existing products that they stock
Customer needs are yet another important factor for retailers. You might have trouble persuading their clients to convert to your items if they anticipate seeing the goods of a more established firm (perhaps with a recognized brand) stocked.
Difficulty actually meeting the production volumes required by large stores
Meeting the production demands that the retailers may have is the last barrier you might face in getting your products on the shelf. Scaling up production can be challenging; for instance, unexpected surges in order volume may cause cash flow problems (you could not get paid for many months).
Getting your products on the retailer’s shelves
When attempting to get your products on retailer shelves, it is crucial to methodically evaluate the reasons why they are hesitant to carry your products and to hunt for solutions to each of those issues.
You may improve your chances of getting your products on the shelves, for instance, if retailers are worried that they already stock a similar product offering (and possibly one that their customers expect), by emphasizing the special qualities of the products that distinguish your offerings from those of competitors. Similar to this, concentrating on this may be a useful approach to enter the distribution channel if your products would draw a different group of consumers than competing products (and perhaps especially if they are consumers that the store is specifically aiming to recruit).
Ways of working around this barrier to entry
Of course, it’s crucial to investigate whether there are solutions to remove entry barriers when beginning a business in addition to being aware of them.
If your company is unable to use conventional distribution channels, it is worthwhile to look into potential alternatives for getting your goods to market. Using social media as a sales channel is one option. By leveling the playing field, you may be able to increase your sales on a platform where current dominant companies may not be as powerful.
Channels to Market: Know Your Place
Are your marketing channels fixed in stone? Actually, you should periodically review them to make sure you’re adapting to shifting market conditions. Only one out of every four business-to-business firms employs a channel strategy.
Developing a strong route to market
Businesses that sell to other businesses typically do direct customer sales through their own sales representatives or distributors. They both have benefits and drawbacks.
A business has far more marketing control thanks to direct sales. It enables direct price negotiation, gives the seller access to the customer’s decision-makers and specifiers, and yields the complete margin.
Distributors, on the other hand, make money by generating sales, relieving the manufacturer of the costs associated with credit management, and offering a wide geographic distribution of stocking sites. Markets with a strong need for sales assistance and a large number of small consumers are well suited for distributors. They offer a productive way to sell tools to industry, components to electronic companies, or auto parts to mechanic shops. They might not be suitable for the sale of intricate industrial facilities, airplanes, or castings.
Even though it is simple for businesses to sell goods online these days, it is surprising how few B2B enterprises actually trade and accept payments on their websites. They are concerned that doing so will make their merchants hostile. They can also worry that online sales reveal too much information about their prices to the public. Manufacturers have historically been able to profit from the market by using opaque pricing strategies that are hidden from competitors.
The Midland, Michigan-based silicones maker Dow Corning offers a compelling case study of a business that effectively modified its channel strategy in response to shifting market dynamics. For many years, Dow Corning sold its products directly (as well as through distribution), like many other business-to-business enterprises, and was under intense pressure from American, German, and Japanese rivals. It struggled to discipline its sales and technical teams to restrict service levels to small or price-sensitive customers.
In 2002, Dow Corning made the audacious decision to launch an online ordering and payment system for their goods. To make sure that buyers understood that purchasing through this channel implied different terms and conditions than would be available through the conventional Dow Corning sales teams, they named this website Xiameter. Since the self-service, low-cost, online option has been so popular, 30% of sales now start there, which is almost three times the industry average.
The Dow Corning case study serves as an excellent example of the significance of identifying shifting market needs and the bravery to create audacious strategies that will satisfy them. For a few more years, we may anticipate that distributors and direct sales teams will handle the majority of business-to-business enterprises’ sales. There is no one secret to the effective selection and administration of distributors, but the following factors are important to take into account.
• Seek specialists. Distributors specializing in a narrow field are likely to have the best understanding of the needs of their customers and know where the potential lies.
• Regard distributors as an extension of your own company. Regular conferences and visits to distributors bind them together and sort out problems.
• Provide training. Distributors’ staff should be trained in both sales and technical service.
• Set codes for merchandising. This is extremely important in franchised operations where the many privately run merchants can present themselves as a single company to the market place.
• Provide marketing assistance. Tool kits should be provided that will help distributors place entries in directories, show where to look for prospects, organize direct mail campaigns and place ads in journals.
• Offer good margins. Distributors need margins to survive. Their margin should be sufficient to cover all their marketing, servicing and stocking costs and provide a healthy profit incentive.
• Keep the distributor interested. Distributors are under constant pressure to take on a new range or a new supplier. Distributor incentives and prizes, newsletters and constant support in the form of visits are important in keeping distributors interested and stop them being tempted away.
M&A Sales Integration: Creating Value from Channels
Account management, field sales, sales operations, internal sales, channels, preventing channel conflicts, and other sub-areas are all included in the sales function. Channels broaden the market’s reach and make it possible for businesses to compete internationally. There are several channel partners, including system integrators, distributors, and direct resellers.
A source of cost and revenue synergy can be found in channel management and integration. For instance, the Tech sector sees channels account for almost 66% of sales, with double-digit growth over the past five years.
The planning step for channel integration must take into account the effects of immediate combination, stage integration, and leaving some things alone. Stability and synergies are greatly influenced by a consolidated channel structure, channel partner tiers, contracts, sales procedures, data management from POS and CRM systems, sales remuneration, and incentives.
Seven specific areas need to be thought through in an M&A Integration:
When integrating the sales channels, some key questions will need to be addressed:
• How is the acquired company’s channel organization (channel sales, sales admin, and partner operations) structured?
• What is the headcount by function/process area?
• What are the functions supported by the partner operations organization? What are the similarities and differences?
• Are there other channel activities managed elsewhere? e.g., partner training, channel marketing, etc.?
• What is the partner coverage model? 1:1 Channel Business Manager assignment or group assignment by partner membership level/tier?
• What is the channel operating model? Gold, silver, bronze, etc.
• Do partners stock? (not applicable for most enterprise software sales and XaaS sales)
• What percentage of channel sales are drop-shipped? (not applicable for most enterprise software sales and XaaS sales)
• What is the partner management cadence and structure? How is it different by partner tier?
• What is the list of partners (including Distributors) along with sell-in and sale-out data for the past few completed quarters?
• How does the partner list of the acquired company map to that of the acquiring company?
• How is partner sales goal attainment managed?
• How is the partner compensation matrix managed? Is it by product line or flat across product lines?
• How is the channel program structured? What are the key elements of the channel program? Is it a single umbrella program or a collection of small programs?
• How is MDF planned, managed, and disbursed?
• How are partner agreements managed? Do all partners have a partner agreement with the company or is it only applicable to the distributors and other direct buying partners (like Direct Market Resellers, System Integrators, etc.)? Are the partner agreements evergreen or do they expire after a certain duration?
• What are the different partner types? How do they map to that of the acquiring company?
• Are partner relationships managed locally at the country level or are they managed globally?
Most businesses focus heavily on their clients and staff, and with good reason—the channel space is frequently disregarded. From the perspectives of value protection (compliance, disputes, etc.), value capture (cost synergies), and new value creation (revenue synergies), effective channel integration is required. There are many things that must be in place on Day One, and including channel partners in integration efforts will help to retain them as well as key personnel and boost product placements and penetration while bringing in new partners.
Tortuga Backpacks beat channel conflict with its pricing strategy
The advantages of increasing marketing through various channels are too great to ignore. It can assist you, for instance:
– open up multiple touchpoints to connect with shoppers
– drive new demand, and
– give customers the flexibility to self-direct their conversion paths.
But failing to harmonize prices across the channels could cause major conflicts.
For instance, offering a product for $15 online and $25 in-store could drastically reduce offline demand by stealing revenues from the retail establishments. Of course, a brand must decide whether to harmonize prices or end one of the channels in order to resolve this dispute.
Sadly, the first choice will reduce their profit margin, while the second choice shouldn’t even be a topic of conversation.
However, Tortuga Backpacks, an online seller of travel backpacks, outwitted this mess by setting prices strategically across all of its channels.
Lets find out what we can learn from them.
The company’s most expensive product is available for purchase on Tortugabackpacks.com, an online store.
However, in order to shift the remaining stock of older or discontinued products, the corporation lists the older version of a product on Amazon, targeting particular demographics for a reduced price. The similar approach is used with Tortuga women’s backpacks.
The brand can use the method to avoid having the identical SKUs compete directly with one other and to better serve their thrifty customer base.
The CEO of Tortuga Backpacks, Fred Perrotta, has described how they email the Amazon URLs to customers who inquire about discounts or complain that they cannot afford the item.
Key takeaway: Tortuga Backpacks was able to create demand and move inventory without channel conflict by wisely pricing across already-existing channels.
Exercise 4.5: A Team-Made Puzzle
Course Manual 6: Brand Platform
The Role of a Brand Platform
A brand platform is a foundational structure that establishes a company’s primary identity.
It provides a set of standards and concepts that serve as the foundation for all messaging, communication, and marketing efforts targeted at promoting the organization’s growth and success.
A brand platform, at its core, clarifies a company’s distinctive value offer, distinguishes it from competitors, and shapes customer perceptions.
It generates a distinctive and unified picture that connects with customers and stakeholders alike by identifying the essence of the company’s identity.
In essence, a brand platform serves as the strategic underpinning for all branding and marketing efforts, and it is crucial in establishing an organization’s overall direction and success.
Branding Platform by Definition
A brand platform is an overall set of beliefs, principles, and ideas that build a company’s identity. It usually includes a goal statement, major messaging points, fundamental beliefs, and personality qualities. A well-defined brand platform, when done correctly, helps to create an organization’s reputation in the marketplace, improve communication with customers and prospects, and ultimately promote business success.
Branding Platform Components
A brand platform’s essential components include a mission statement, core values, target audience, and key message points. Everything from marketing efforts to product descriptions should be based on this data. The goal is for all communications to reflect the company’s identity and effectively communicate its unique value proposition.
The Benefits of Developing a Strong Brand Platform
A strong brand platform is vital for any firm seeking to succeed in the marketplace. It aids in the development of trustworthiness, the establishment of an identity, and the communication of essential messages.
A well-defined brand platform also allows firms to create a consistent message across all channels, making them more market competitive. Furthermore, having a strong brand platform can help a company differentiate itself from its competitors and drive customer loyalty.
Brands With a Killer Brand Strategy: Ben & Jerry’s Brand Values
Ben & Jerry’s sells ice cream and also believes in “using our business to make the world a better place.”
Human rights and dignity, social and economic justice for historically marginalized people, and restoring the Earth’s natural systems are all important to the organization.
As a result, whenever there is a need, the corporation actively supports causes that correspond with the values of its brand.
They’ve backed movements such as “defund the police,” “defend black communities,” “Juneteenth”, and many more.
This sense of social responsibility has enabled them to retain and extend their consumer base.
Brands With a Killer Brand Strategy: Dollar Shave Club’s Brand Positioning and Personality
Dollar Shave Club is a men’s grooming product company that appeals to real people.
In their campaigns, the brand takes a lighthearted and relaxed approach, and instead of using superstar handsome models like other brands in their market, the company employs models who are relatable to the average person in real life.
Models who resemble genuine consumers and with whom people can readily connect.
The Role of M&A in Brand Building
A modern brand’s competitive edge cannot be established on logo design, taglines, packaging, or marketing campaigns alone. The goal of developing a strong brand image is to differentiate from competitors, stand out from the crowd, and influence a consumer’s purchasing choice. However, not all brands have the ability to become what they want on their own. In certain cases, a merger or acquisition might help propel a brand to new heights. Rather than building new capabilities internally, the correct alliance might provide a substantial boost to a brand’s products or services, or even an illusory advantage that makes them more appealing. In today’s ultra-competitive global business, the slightest advantage in perception can sometimes be the difference between success and failure.
How a merger or acquisition can be a strategic investment in branding
While the majority of mergers are based on cost savings and economies of scale, the most significant mergers and acquisitions for brand-building are those that add to a company’s competitive advantage rather than just its bottom line.
Gaining authenticity or altering personality: For a brand battling for relevance in a competitive climate, the appropriate acquisition can provide the authenticity required to establish credibility in a new field. This is exactly what Lenovo anticipated when it purchased IBM’s PC division in 2005, quickly becoming the world’s third largest computer manufacturer. Yahoo has recently been through a makeover as well. Yahoo is a desktop Web corporation reliant on an older demographic, fighting an antiquated image in a social and mobile world. Part of the makeover entails “making ourselves cool,” according to CFO Ken Goldman. To that goal, Yahoo acquired Tumblr in May 2013, capturing the attention of Tumblr’s 300 million monthly unique users, the majority of whom are the 18-25 year-old Millennials it seeks, and creating a solid footing in the social media market.
A doorway to foreign markets: Acquiring a local brand for their unique knowledge and distribution network is a frequent strategy for a western brand to break into a new region, particularly Asia’s rising markets, which are not well understood by many western companies. Diageo, for example, recently acquired the manufacturer of a traditional Chinese liquor known as baijiu as part of its plan to attain 50% of sales revenue from developing nations within a few years. Starbucks purchased Teavana, a global chain of loose-leaf tea retailers, in 2012, pursuing a less straightforward route to increasing sales from Asia. In addition to their existing Tazo teabag brand, Starbucks CEO Howard Schultz hopes to make Starbucks tea a force in Asia, where the beverage is far more popular than coffee.
However, not all foreign acquisitions are aimed at expanding into new markets. Geely, a Chinese automobile manufacturer, purchased Volvo in 2010. While the acquisition provided a foothold in markets outside of China, it was also about competing in local markets where European brands are perceived to be of higher quality and more prestigious.
Recruiting brilliant individuals: One of a brand’s most significant assets are the individuals whose ideas and efforts propel the firm every day. However, traditional human resource management can make it difficult to dramatically transform a workforce or introduce new ways of thinking on a large scale. This dilemma has given rise to the “acqui-hire” phenomenon, in which one business buys another for its people rather than its products. Since Marissa Mayer took over as CEO last summer, Yahoo has “acqui-hired” ten companies, integrating their teams into larger projects as part of the previously mentioned transformation.
People are the heart of a brand, and their shared culture is the spirit that can propel a company to greatness. One of the primary advantages of an acqui-hire is that it maintains employee harmony while still having a meaningful impact on the workforce. For starters, it avoids head-hunting and compensation negotiations, which frequently necessitate a salary premium above existing staff, which may cause animosity. But, more importantly, it brings together entire teams that share a common goal and communicate well with one another.
Acquiring ideas: Buying a firm just for its intellectual property can help a band overcome its flaws and become a category leader. It is also considered a more cleaner purchase process because it is concerned solely with a company’s ideas rather than its real assets such as buildings, factories, or workers. Google purchased 54 companies in 2011 alone for their patents and intellectual property, becoming the world’s most dominating web company. Purchasing or licensing intellectual property can also assist highly inventive companies shield themselves from brand-damaging infringement claims. It can be a wise defensive tactic to just buy a competitor rather than become embroiled in a legal dispute over its technology later on – exactly the method Google used when it bought Motorola in 2012, partly to stave off legal attacks on its Android platform.
A brand is the source of a customer promise. Any brand can promise relevant, differentiated benefits, but delivering on them in practice is much more difficult. A merger or purchase might often be the most efficient way for a brand to alter itself. A strategic investment in branding can occasionally take the shape of a merger or acquisition, depending on whether the consumer’s associations with a brand are due to its perceived authenticity or personality, the people who work for it, or the attributes of the products or services itself.
The Role of Brand in M&A Success
Given the importance of branding in conjunction with an M&A transaction, one may expect it to be one of the most thoroughly researched items in any transaction. However, the core brand decisions are frequently rushed and poorly planned in the aftermath of the countless complex decisions that the leadership team is required to make before, during, and after a merger.
Mergers and acquisitions have long been a crucial strategy for companies all over the world. The belief that integrating two firms’ employees, product lines, technology, and logistics can propel the joint enterprise to new heights by driving growth and increasing efficiency. Over 36,000 M&A transactions were completed globally in 2022 alone.
With so much M&A activity each year, it’s mind-boggling to realize that the failure rate of mergers and acquisitions is believed to be between 70-90%, and that poorly conceived or managed mergers and acquisitions have lost more than $200 billion in shareholder value over a 20-year period. According to Ashwath Damodaran, Professor at NYU Stern, “acquisitions destroy more value than any other single action taken by companies.”
Many factors contribute to failed mergers and acquisitions, but the keys to success are often less tangible than just financials or operational integration. Market rejection and a lack of stakeholder participation are two main causes of M&A failure, and both can be improved at least partially by careful brand selection.
What’s in a Brand?
Brand is a much broader and more sophisticated notion than it is typically understood. It is defined by Seth Godin as “a set of expectations, memories, stories, and relationships that account for a decision to choose one product or service over another.”
Finally, a brand is all of the content associated with a product’s, service’s, or organization’s image, personality, or attributes. A well-constructed brand’s artifacts include its name, logo, symbols, colors, packaging, values, messaging, and storytelling, among other things. In an M&A situation, several decisions about the brand must be taken, such as the new entity’s vision/mission, name, logo system, messaging, and so on. These are critical in determining how the new entity is perceived and received.
Brand Signals
The brand questions and judgments made by leadership are critical in integrating the merged business and maximizing long-term value. Following a merger or acquisition, brand decisions are used to signal the rationale – both financial and strategic. Forward brand strategy explains why a merger or acquisition makes sense and creates a compelling vision for the combined business that connects with employees, consumers, and the outside world.
Employees
According to analysts, one of the most significant barriers to integration following a merger or acquisition is clashing company cultures. As a result, there is a clear and pressing need to convey the impact of M&A to affected teams.
Employees on all sides must grasp the organization’s future. Employees of the purchased corporation understandably worry about the future, and there may be a natural skepticism of the acquiring company (especially if the companies were competitors). Employees are frequently concerned that increased departmental efficiencies would result in job loss or that changes in structure, methods, or culture will dramatically alter their day-to-day role.
While members of the acquiring organization are likely to share some of the aforementioned concerns, they can also develop a ‘conquering army mentality.’ While this may occur more frequently than it should, it is critical for the team to recognize that their new colleagues were an important contributor to the value that drove the transaction.
Once the structural impact is obvious and team members are aware of their particular fates, brand selection sends signals about what the company aspires to be – and says volumes about strategy and values. The brand decision and communication give direction and inspiration for the new company’s path to accelerate profitable growth and fully realize the transaction’s potential.
Customers
The form of the client engagement varies depending on the sort of business, but in all situations, from banking to technology to consumer packaged products, brand decisions reveal where the firm is headed, how it perceives itself, which values/attributes it wishes to promote, and more.
Customers will want to know that the operational challenges of integration will not interfere with the level of service they have come to expect from their partner. They want to know (and the corporation wants them to know) how the acquisition will improve their lives – new products, capacities, and so on. Their concerns will even extend to day-to-day interactions: will I be dealing with the same people I’ve come to rely on? Will my contract pricing and terms remain the same or change?
What about clients of one firm who have made a conscious decision not to do business with the other company involved in the merger or acquisition? What about prospective clients that are in the market to buy? What about lapsed clients, where regaining their trust is the primary goal?
There are numerous client segments in the market, and brand strategy affects all of them. Communicating with customers during the merger process shows attention to and commitment to consumer demands.
Stakeholders
This is a broad category that includes investors, partners, and other entities that play a role in the often-complex web of stakeholders. These groups may not have the same emotional relationship to the brands in question, but they are paying close attention to the signals brand choices make about the company’s future direction.
While these groups often have different motivations, they are all interested in the new entity’s success. Given the high failure rate of most mergers and acquisitions, a well-developed brand strategy provides peace of mind and demonstrates the leadership team’s confidence and decisiveness.
When mergers and acquisitions lack a clear brand strategy, communications to key stakeholders are poorly performed and fail to represent the collective organization’s advantage or vision. So the stakes are clear: in order to fully realize the potential of M&A, investors, executives, and integration teams must prioritize and deliberate on the appropriate brand architecture.
Branding During Mergers & Acquisitions: Beating the Odds
Despite their frequency, research indicates that up to 60% of mergers and acquisitions result in the destruction of shareholder value. A bad merger or acquisition can result in significant asset and staff losses, quick divestiture, and, in some cases, bankruptcy. A lack of brand strategy for the new organization is frequently cited as a reason in such failures. Prioritizing brand strategy and determining which technique is best for your brand(s) may make or break your business.
How can you beat the odds with your merger or acquisition?
In this paper, we will examine four distinct approaches to brand strategy and highlight the value of branding during mergers and acquisitions. Organizations have four key strategic branding alternatives during a merger or acquisition. They may choose to support the stronger brand, blend the brands, take a brand-new approach, or simply go about their business as normal.
Backing the Stronger Brand
The first alternative, Supporting the Stronger Brand, usually entails the larger, ‘stronger’ brand absorbing the smaller, ‘weaker’ brand. The inverse is also conceivable when a larger corporation with a negative reputation acquires a smaller company with a good reputation. The merger or purchase might be positioned as an upgrade because both companies can benefit from the reputation of the stronger brand. This strategy can raise employee excitement as they see the brand’s reputation develop, as well as the perceived worth of your product or service. Be careful, however, that this method may generate a winner/loser mentality between the two firms, which may cause tension throughout the transfer and harm employee morale.
Organizations may choose to integrate both names and brands for a limited time. This can help ease stakeholders through the transition time, but it can also lengthen the total process.
When a strong firm acquires a weaker one, it creates a chance to modernize the weaker brand. However, if expectations for the update are not met through tangible improvements to the brand experience, this strategy may backfire, leaving employees and customers skeptical of the deal’s real-world value.
Blending the Brands
The second option combines the two collaborating organizations into a new entity that keeps essential components of both of its previous brand identities. This strategy strives to capitalize on the best parts of both brands and recommend to internal and external stakeholders the formation of a stronger whole. While keeping both organizations’ original names and branding often provides the most seamless transition, this approach eliminates the strategic potential to build on each brand’s strengths while addressing perceived weaknesses.
Another option is to combine brand names while introducing a new symbol or visual identity to reflect the brands’ integrated nature coming forward. This strategy must be complemented by strong messaging about why the merger or acquisition benefits employees and consumers, and how the new identity will enable the firm to provide a better experience in the future.
Blending brands can help firms avoid the perception of a winner or loser in a merger or acquisition and pave the path for simpler integration. This strategy, however, may produce misunderstanding about the new entity’s intended behaviors and core principles, as well as its leadership structure. Also, keep in mind that combining brands means combining customers’ feelings about the two former companies, whether positive or negative.
Brand-New
The third method is to develop a whole new brand identity for the merging companies that incorporates all of the new brand’s assets. This is a risk because both organizations must abandon their established brand equity, which necessitates more planning and resources to execute. This method, on the other hand, allows you to more readily shed negative perceptions of either brand; a clear and consistent brand strategy is essential since staff will need to understand and identify with the new brand in order to communicate its values to customers.
Business-as-Usual
The third method is to allow the two brands to run separately, implementing back-end streamlining while keeping the distinct identities of the original brands. In many ways, this is the easiest strategy because it has the fewest immediate branding ramifications. Large corporations that have numerous trustworthy brands in their portfolios—each with long-term, devoted customers—often employ this method.
To avoid competition between two or more brands after the transition, care must be taken to ensure that resources are not squandered through duplication of efforts across the business. While less complicated than the other approaches, doing business as usual still necessitates careful consideration. Employees must understand why the merger or acquisition occurred, what it implies for each company, and how the companies will work together in the future.
Seize the Opportunity
It is tough to make a merger or acquisition work for all stakeholders, but a clear and well-defined brand strategy can help you overcome many of the common obstacles that brands experience when embarking on mergers and acquisitions. Throughout the process, make sure to keep your messaging consistent and to communicate clearly and efficiently with employees, customers, and investors. Gaining a thorough understanding of both brands and their respective markets via extensive research and analysis can aid in the development of your brand strategy and increase your chances of success.
Exercise 4.6: Game of Possibilities
Course Manual 7: Scope Vs Scale
Scale or scope?
The critical choice for business buyers
The majority of corporate purchases fall into one of two categories: scale or scope. While an M&A transaction can achieve both of these objectives, successful buyers typically decide which type of transaction will best serve their long-term strategic objectives before beginning the acquisition process.
By deciding between scale and scope, you may tune out the “noise” and focus on specific acquisition requirements. You can wind yourself passing up a company that is enticing in many other ways but does not work strategically. Alternatively, you could buy a company that appears to have little in common with your own but offers specific long-term opportunities.
The case for scale
A scale purchase occurs when a buyer aims to expand its presence in a certain industry or sector and hopes to obtain larger overall economies of scale. Buyers generally target a competitor or a company in a related sector or a new geographic market for such acquisitions. Ideally, both companies should bear comparable costs.
While there are numerous potential economies of scale, the following are some examples:
Reducing expenses. The acquisition of a competitor may allow for the consolidation of activities, lowering the new entity’s overall overhead and administrative costs. The combined business is also likely to have stronger purchasing power as it negotiates prices with suppliers, which can cut variable costs such direct materials and labor as well as fixed overhead costs like rent and insurance premiums. Mergers of various kinds of businesses, from oil pipelines (such as Kinder Morgan and El Paso Corp.) to airlines (such as Southwest and AirTran), have been accomplished in order to get more “bang for the buck.”
Exxon to merge some business units as part of cost-cutting plan
Exxon Mobil Corp (XOM.N) announced in February 2023 it is merging some business units as part of an effort to cut annual costs by $9 billion by 2023 from 2019 levels.
The move follows the restructuring of Exxon’s top businesses disclosed last year, and addresses a second layer of management. The changes include combining into a global trading desk all of Exxon’s trading activities, from oil to power and freights.
Shares in the company, which posted a record $56 billion net profit in 2022, rose 1.5% following the report.
The American oil corporation said last year that it will divide into three companies, Upstream, Low Carbon Solutions, and Product Solutions, which incorporated chemical and refining operations.
Exxon has now announced that it will merge smaller entities to concentrate choices about, among other things, the supply chain, purchasing, and the acquisition of raw materials.
By eliminating the potential of multiple Exxon units negotiating different contracts with the same supplier, for example, the shift aims to give Exxon more negotiating power when it comes to agreements with third parties.
“We want simpler processes and more modern tools that allow us to work more quickly and with less frustration, at lower cost,” Exxon said in a memo to Reuters.
The company, which has been reducing the size of its workforce, said the latest changes “are not about headcount reductions.” Exxon has been on a major cost-cutting drive after suffering a historic loss in 2020.
Building a capital base. A successful purchase can propel your company to the next stage of its growth cycle. For example, a medium business that acquires a comparable-sized competitor may suddenly generate sufficient revenue to invest in new equipment and technology upgrades that dramatically increase production productivity and enhance quality. Furthermore, larger borrowers are perceived as less risky by lenders, so a scale merger can improve your access to lower-cost financing.
Expanding research and development (R&D).A large-scale merger may allow you to cast a broader net and gather new business intelligence. In the pharmaceutical industry, for example, success is dependent on developing the next big medicine. A corporation may acquire a competitor in order to consolidate R&D departments and apply R&D funds to a broader number of prospective sales prospects.
Support for scope
Scale transactions are more concerned with simplifying processes and saving expenses. These agreements are typically conducted by corporations that are already well-established in their current industry but desire to branch out. Using this strategy, Mondelez International has acquired several companies, including Kraft Foods and Cadbury.
Scope buyers frequently utilize their purchase as a launching pad into fresh and unexpected territory. The long-term objectives of such a plan are as follows:
• Expand the company’s breadth and geographic range,
• Open up new markets,
• Sell products to new customers, and
• Diversify the company.
This last objective is important because it makes the acquiring company less susceptible to market fluctuations and product cycle downturns.
It’s crucial to realize that deals of any size or scope can be risky. Buyers in a large transaction run the risk of dedicating too much time and attention to cost-cutting initiatives when their major focus should be on integrating the acquisition. Fixating on (sometimes insignificant) cost synergies can stymie future growth, not to mention staff morale.
Scope transactions have the potential to be unrealistic if not supported by thorough due diligence and at least some core compatibility between the two companies. If you buy a company in an unfamiliar industry with a significantly distinct corporate culture, you should expect significant integration issues.
Seller on board
Given the complexities of these requirements, buyers and sellers must agree on the basic strategic purpose of a purchase. Knowing what type of deal you want and ensuring that your vendor supports your objectives will help you make the best decision.
Economies of Scale: What Are They and How Are They Used?
Economies of scale are cost advantages that businesses enjoy as a result of efficient production. In order to attain economies of scale, businesses must increase production while reducing expenses. Costs are distributed among a greater variety of commodities, which is why this occurs. Both fixed and variable costs are possible.
Understanding Economies of Scale
In general, economies of scale depend on the size of the company. The amount of cost reductions increases with business size. Scale economies might be internal or external. While external economies of scale are influenced by external factors, internal economies of scale are based on management decisions.
Accounting, IT, and marketing are examples of internal functions that are also seen as operational efficiency and synergies.
Economies of scale, which represent the cost savings and competitive advantages larger organizations have over smaller ones, are a crucial idea for any business in any industry.
The majority of customers don’t comprehend why a smaller firm would price more for a comparable product offered by a bigger corporation. Because of how much the company produces, the cost per unit varies. By spreading the expense of production over a greater volume of items, larger enterprises are able to create more. If numerous businesses are producing comparable goods inside a certain industry, that industry may also be able to control how much a product costs.
Several factors contribute to economies of scale resulting in lower per-unit costs. First, increased worker specialization and technological integration increase production rates. Second, cheaper per-unit expenses may result from supplier bulk orders, larger advertising purchases, or lower capital costs. Third, spreading internal function costs over a greater number of manufactured and sold units aids in cost reduction.
MCI and WorldCom’s Merger for greater economies of scale
The largest business merger in American history, the $37 billion merger of WorldCom with MCI Communications to establish MCI WorldCom was announced on November 4, 1997. The transaction was completed on September 15, 1998, becoming MCI WorldCom.
In a $37 billion merger in 1997, WorldCom and MCI combined. The takeover conflict between WorldCom, British Telecommunications Plc, and GTE Corp. for control of MCI Communications Corp. was ultimately won by WorldCom. A $30 billion telecommunications conglomerate was produced as a result of the merger in 1998.
In order to build a major powerhouse in international telecommunications and Internet services, the agreement brought together the second and fourth largest US long-distance service providers. The new business was given the moniker MCI WorldCom, and it overtook AT&T Corporation as the second-largest long-distance carrier.
In comparison to AT&T, which held a roughly 50% share of the long-distance market, the newly combined MCI WorldCom held around 25% of it. MCI WorldCom grew to be the largest Internet traffic carrier in the world as well as one of the biggest providers of local, long-distance, and Internet services to more than 22 million customers in more than 200 countries.
For each MCI share they owned, stockholders received $51 in WorldCom common shares. Verizon Communications and MCI came to an agreement in 2005 to buy each other for $7.6 billion. Through the acquisition of MCI, Verizon gained access to an international long-distance network and a number of sizable corporate clients.
Due to its size and resources, the merged telecom business was able to compete more successfully with its rivals and emerged as one of the major players in the sector.
Internal vs. External Economies of Scale
As mentioned above, there are two different types of economies of scale.
• Internal economies of scale: Originate within the company, due to changes in how that company functions or produces goods
• External economies of scale: Based on factors that affect the entire industry, rather than a single company
Internal Economies of Scale
Internal economies of scale are exclusive to a given company since they result from internal cost reductions. This can be the outcome of the company’s size in general or of decisions made by the management of the organization. Internal economies of scale come in a variety of forms. These consist of:
• Technical: large-scale machines or production processes that increase productivity
• Purchasing: discounts on cost due to purchasing in bulk
• Managerial: employing specialists to oversee and improve different parts of the production process
• Risk-Bearing: spreading risks out across multiple investors
• Financial: higher creditworthiness, which increases access to capital and more favorable interest rates
• Marketing: more advertising power spread out across a larger market, as well as a position in the market to negotiate
Because they can, for instance, buy resources in bulk, have a patent or special technology, or have access to more capital, larger companies are frequently able to achieve internal economies of scale—lowering their costs and raising their production levels.
External Economies of Scale
On the other hand, external economies of scale are attained as a result of external causes or factors that have an impact on the entire sector. This implies that no corporation manages costs independently. These happen when there is a pool of highly skilled workers, when there are tax breaks or subsidies, when there are partnerships and joint ventures, or whenever there is anything else that can reduce costs for numerous businesses in a given sector.
Limits to Economies of Scale
Limits to economies of scale have been the focus of management approaches and technology for decades.
Lower setup costs are a result of more adaptable technology. Equipment costs are more closely matched to production capacity, making it easier for smaller companies like craft breweries and steel mini-mills to compete.
Costs become more comparable across companies of different sizes when functional services are outsourced. Accounting, human resources, marketing, treasury, law, and information technology are some of these functional services.
Set-up and production costs can be reduced by micromanufacturing, hyper-local manufacturing, and additive manufacturing (3D printing). Regardless of the size of a certain factory, global trade and logistics have helped to cut costs.
The International Monetary Fund reports that during the past three decades, prices for capital goods and the cost of machinery and equipment have decreased in emerging, developed, and even industrial nations.
Examples of Economies of Scale
In a hospital, a doctor visit still lasts for 20 minutes, but the hospital system’s administrative expenses are split among more doctor visits, and the person helping the doctor is no longer a licensed nurse but rather a technician or nursing assistant.
Groups of products, such shirts with your brand logo, are produced by job shops. The setup contributes significantly to the price. Larger production runs in job shops have lower unit costs because the setup expenditures of developing the logo and producing the silk-screen pattern are dispersed over a greater number of shirts. More seamless technology with robots in an assembly facility lowers per-unit expenses.
The limitations of economies of scale are frequently demonstrated in a restaurant kitchen where there are many chefs crammed into a tiny area. This has been depicted in economics charts as resembling a U-shaped curve, where the average cost per unit first decreases and then increases. It is known as “dis-economies of scale” when costs increase as production volume increases.
Scope vs Scale: The Shifting Trend in M&A Activity
In the same way that business owners have a wide range of motivations to exit their company, buyers pursue acquisitions with a variety of goals in mind. Broadly speaking, these goals can be broken down into two categories:
1. Scale acquisitions
2. Scope acquisitions
Buyers who use a scale strategy are drawn to transactions with revenue-based synergies. These purchases are made to aid purchasers in achieving better economies of scale, which results in less money leaving the company while bringing more money in. There are several ways to make this balance better, including:
• Improving cost efficiencies – consolidating operations can lower total operation and administrative costs, giving customers “more bang for their buck”
• Building a capital base – an acquisition could help a business advance more quickly and affordably.
• Increasing R&D – these acquisitions may give the buyer access to fresh information and procedures to boost productivity and increase sales of the purchased goods.
In contrast, scope acquisitions are more focused on moving businesses in a new direction than on cost effectiveness. In most cases, the acquiring company is well-established in its field and buys another company to serve as a springboard for new chances. Several advantages could result from this, including:
• Expanding a company’s reach, both in terms of capability and geography
• Opening new markets
• Introducing new products/services
• Diversifying the company’s culture
Scale acquisitions were historically the main priority of strategic buyers. The difference between the number of size and scope acquisitions, however, gradually reduced in recent years, partly as a result of the growth in private equity investment and reach. For the first time in 2018, scope outranked scale, accounting for 51% of worldwide M&A activity (up from 41% since 2015).
Despite possibly being small, the gap is significant. It suggests that a growing number of purchasers are gravitating toward acquiring businesses that can increase their capabilities.
Bain’s assessment, which notes a four-fold growth in corporate venture capital investment since 2013, provides additional support for this. This suggests that a lot of acquisitions in the lower middle market are motivated by scope, particularly those that target businesses with a focus on cutting-edge technologies like the Internet of Things, digital advertising, and cybersecurity.
Les Baird, one of Bain’s senior partners, commented on this shift toward scope acquisitions and what effect this will have over the coming years:
We anticipate that the trend will continue, in large part because more and more business leaders are turning to mergers and acquisitions (M&A) to help them overcome the age-old “do I build it or do I buy it?” decision.
Of course, this doesn’t spell the end for scale purchases, as the need to increase revenue and cut costs will continue to drive many of these deals. However, this trend should be influencing how dealmakers conduct due diligence, negotiate with buyers, and decide how to market a company as it prepares to go public, particularly in middle market M&A and lower.
Knowing Your Buyer’s M&A Strategy
Despite the fact that Bain’s analysis of 2018 is filled with useful information for dealmakers, buyers, and sellers, if you only remember one thing from it, make it the significance of understanding company buyers’ motivations.
A company could be easily discovered by one buyer to increase cost efficiency, while another is focused on researching its industry for the first time, due to the extremely narrow difference between scale and scope acquisitions. The secret to business owners planning their exit is understanding a buyer’s goals and positioning your firm appropriately.
Let’s say you intend to close your company soon. If you find a buyer who is interested in a large acquisition, you should prepare a list of ways your company may lower the acquirer’s costs or improve the efficiency of their operations.
If the buyer is more concerned with scope, however, you should highlight your market share, industry expertise, and staff members’ talent to show them that you can support them in succeeding in an untapped area. This lowers the risk involved in such transactions and aids in your pursuit of a profitable exit.
Scale or scope?
Scale vs. scope analysis provides many buyers with crucial information regarding the long-term value of a potential acquisition. A company’s expansion in its current business is fueled by scale agreements because they contain a significant amount of business overlap between the target and the acquirer. Scope acquisitions allow an acquirer to access a new market, product line, or channel because the target is a connected but separate business. Both can be helpful, and the “scale vs. scope” issue has been a hot topic in the M&A community.
Today’s decision has been made. Inexperienced acquirers frequently concentrate primarily on large-scale transactions that strengthen or solidify their market position. Experienced acquirers typically combine scale and scope transactions 50/50, strengthening their market positions while also acquiring new product lines, geographic territories, or other crucial skills. Figure 2 accentuates this contrast: It contrasts “Large Bets,” or businesses that occasionally make significant acquisitions, with “Mountain Climbers,” or active buyers whose purchases account for at least 75% of their market capitalization. Recent Bain research demonstrates how much more assured these seasoned acquirers are: When asked about entering a nearby market, 73% believed that M&A was more likely to be successful than starting a company from scratch. Only 55% of novice acquirers shared these sentiments. And our research demonstrates that the most successful results are typically produced by experienced acquirers.
Each type of transaction is accompanied by a unique pattern of risk and return. Cost synergies have generally been at the top of the deal thesis for scale deals: if we buy this firm, we will have a bigger market presence and experience more economies of scale. The possibility exists that the acquisition will end up building a sluggish behemoth and that the synergies won’t ever manifest. Contrarily, scope agreements typically prioritize expansion as the deal thesis: By acquiring this business, we gain entry to markets that are developing more quickly. Here, there is a chance that the acquirer will make mistakes as it learns how to run an unfamiliar company. Scale deals and scope deals are fundamentally distinct from one another, therefore every aspect of the deal cycle, from planning to integration, needs to be handled differently. Scale acquisitions are successful because of their quick general integration, ability to achieve cost synergies, and complete cultural integration. Scope deals are successful when the buyer maintains the distinctive characteristics of the business it has just acquired, integrating the two just where it matters, and when the two companies start to interact and build a foundation for future growth. An acquiring business gains knowledge of the distinctions between scale and scope acquisitions as it gains expertise and can subsequently control the risks and optimize the advantages.
Exercise 4.7: My favorite brand
Course Manual 8: Mind the ‘Gaps’
Making expectations a reality
So what characteristics set the top performers apart from the rest? How did those businesses defy the odds and experience continued development after integration?
Priorities that are centered on the needs of the customer have become crucial accelerators of effective growth linked to M&A transactions. No matter how far into the future it was, successful acquirers remained laser-focused on them from the beginning of a deal until they reached their intended end state. Additionally crucial, they made plans taking into account the connections and dependencies between these areas.
The first three priorities are strategic; they examine how an acquirer must recognize certain opportunities made possible by a merger, devise plans to seize them, and establish financial goals and standards for growth. The following five priorities deal with the tactical—the actions necessary to fulfill the objectives of the agreement and realize the acquisition’s potential based on the strategic priorities. While successful acquirers typically start focusing on these activities before deal close and deploy “clean teams” as needed to accelerate planning using competitively sensitive data, the timing of these activities varies depending on the acquirer. The next step is to create concise short- and long-term plans around the efforts that were most important for promoting growth, and to have the discipline to carry them out.
Figure 2. Focus and timing of key priorities
Source: Deloitte
Priority 1: Market opportunity validation
• How are we positioned as a merged firm in our current markets, and how can we maintain our unique skills to maintain our expansion?
• What new prospects have been made available as a result of the transaction, and which of them have the greatest potential for growth?
• How will this merger or acquisition affect the target markets we serve?
If a deal is growth-oriented, the first consideration is whether the combined firms can actually exploit the growth opportunity. Successful acquirers clearly rank certain opportunities according to predetermined standards like the possibility for revenue growth or margin expansion.
Potential opportunities can be found through market analysis using primary and secondary research by product, customer segment, market size, or region. The deal model, which was developed by bankers and the deal team with relatively little time and data, will be a contribution to this process, but it is often not quite detailed enough. Customers, market analysts, and specialized consultants may be engaged about what they anticipate from a deal while plans cannot be shared externally prior to deal completion.
This research often addresses the precise services the target provides and how they fit into the acquirer’s product line, the competitive strength of the target, and the future market-penetration potential of the combined business. The success of the other priority areas depends on the methodical analysis and prioritization process, which also ensures that all planning efforts are focused on the possibilities with the greatest potential value.
It is crucial to involve those who will ultimately be responsible for achieving results while evaluating prospects. The functional and business unit staff who are ultimately accountable for making the deal successful must lead the analysis and accept its findings.
Realisticism should prevail over optimism when it comes time for the integration team to pitch a good possibility to corporate leadership. A purchase may seem appealing from a product or market perspective, but the numbers must also add up.
In a recent deal involving two software companies, for instance, the acquirer’s strategic justification for pursuing the target company was based on the assumption that it would increase revenue by five times in the first five years following the acquisition. However, the market opportunity analysis conducted by the M&A team ultimately revealed that revenue was only likely to increase by a factor of three, and even that would require the acquirer to take particular steps. This assisted the acquisition in adjusting the integration strategy and in better comprehending the steps that would need to be taken to achieve such growth. The acquirer is currently on pace to plan its expansion to meet its revenue expectations thanks to improved market opportunity analysis and proactive planning.
Priority 2: Go-to-market strategy
• Which specific market segments do each of our two businesses serve, and what is our joint value proposition for each of those areas?
• Which type of sales channel should be used to target particular market segments: direct or indirect?
• If so, how much channel conflict does the new entity cause?
After identifying specific market possibilities, the next stage is to decide how to take advantage of them. A well-thought-out go-to-market strategy is essential to realizing the deal’s growth goals, ensuring business continuity, and making the best use of both firms’ personnel and resources.
Figure 3. Acquisitions can dramatically reshape the go-to-market strategy (illustrative)
Including the target company’s offerings in the acquirer’s mix of goods and services might significantly alter the go-to-market strategy. The argument is illustrated by Figure 3, which was created using research observations. The solid green lines represent the allocation of sales resources to different channels based on the complexity of the prior offering and the size of the customer base. The dotted lines depict the strategy’s evolution following the acquisition. The complexity of product offerings has risen as more integrated solutions integrating the goods and services of the target and acquirer have been developed. As a result, the routes to market have altered, and more products are being pushed into hybrid and indirect channels. This frees up the direct channel to concentrate on the more complex and high-value products. A visual representation of the go-to-market plan can make it easier for dealmakers and those who will actually be implementing it to comprehend and support the deal’s goals.
The goal of the go-to-market strategy is to translate strategic inputs into a growth-oriented, implementable structure that is segmented by market, product, channel, and sales. The effectiveness of the transaction vision, structure, and subsequent decision-making when executing post-close will be determined by the ability to recognize and rank the most important strategic inputs.
This planning can enable better alignment of the post-merger sales channels with the post-merger product portfolio.
The acquisition of a SaaS business with a direct sales approach and its own sales team was being considered by a software company that generally used an indirect sales model (selling through channel partners). The purchasing company concentrated resources up front to assess if it needed to develop more specialized capabilities as well as the appropriate ratio of direct versus indirect sales based on the market strategy it had already defined. Based on this, the business was able to schedule any changes that would need to be made to its sales channels once the deal closed, speeding up the time to results.
Priority 3: Setting revenue targets
• What are the objectives for this acquisition’s revenue and margin?
• Who will be held responsible for the outcomes?
• How will projects be monitored?
It’s been suggested that the secret to successful M&A deals is an obsession with the business case. Setting clear revenue and margin goals for the deal and designating responsible business leaders to meet them is one method to make this emphasis a reality.
Due to the fact that cost reductions are frequently more immediate, precise, and quantitative, many businesses analyze them more closely than revenue effect. Many times, the revenue and margin targets for the new business unit are changed, and synergies are not tracked separately. The business unit may be executing against the strategy that resulted in the purchase, but company officials may not be aware of what they may be leaving on the table if they take this route.
A technology manufacturer recently bought a services firm that had previously offered solutions agnostically, combining hardware from other manufacturers. By replacing the equipment from other suppliers with its own, the buyer anticipated that the business unit’s profits would increase. The question of whether the consumers of the services company would be prepared to move to the acquirer’s equipment remained unanswered, though. Working with the sales team to predict consumer reactions to the change, sometimes down to an account-by-account level, was necessary to assess the impact of such a transition. Which goods are they willing to exchange? Would they object to the change due to the difficulty of the solution or other issues? Before the deal closed, this analysis was necessary to create accurate sales projections and incorporate them into the sales team’s objectives and compensation plan.
Priority 4: Product and service portfolio rationalization
• What products and services will be included in our post-deal portfolio?
• How will they be bundled in terms of value proposition and priced?
• To what extent will we need to rationalize redundant products and services?
• How do we confirm portfolio alignment with our business and go-to-market strategies?
The market opportunity validation carried out at the beginning of the transaction exploration will determine which goods and services the merged firm would promote. The relative merits of short- and long-term prospects should also be carefully considered. In the near future, initiatives might be taken to swiftly develop new product bundles or solutions, or there might be “quick hit” product improvements thanks to technology introduced by the acquired business, or pipeline analysis might highlight particular in-process opportunities to capitalize on the value proposition of the combined entities.
Decisions about longer-term product alignment are naturally more challenging due to issues including consumers’ reluctance to “switch horses,” employees’ commitment to the goods they have worked so hard to develop, and the complexity of the technological and operational environment. However, it is crucial to lay a foundation early on to direct how to organize resources and achieve more thorough product integration or to pool R&D resources to encourage greater collaboration. Messages should explain the M&A process and swiftly reassure markets and customers about the future course of action.
An outline of the high-level product road map serves as the foundation for rationalization. What products do the two companies have in the works, and when will they be ready to launch? Does one business have a product that could be improved by being integrated with one made by the other? How can the acquisition affect how items are bundled and presented as solutions? The services portfolio offers related but different factors. It’s possible that one business charges for services while the other offers them for free. How will services be marketed, packaged, and offered for sale?
The combination of two biotechnology firms sheds light on how to approach these rationalization-related issues. Both businesses provided methods for artificially joining genetic fragments known as gene splicing as well as systems for determining an organism’s DNA known as gene sequencing systems. It was clear that one company had better sequencing systems than the other, and that the latter was better at splicing. The leaders of the soon-to-be amalgamated company gave significant thought to how the streamlining process may effect both companies’ customers. In addition to looking at how to transfer clients who currently use weaker products to stronger ones throughout their subsequent buying cycle, they also looked at how to set pricing, incentives, and other offering characteristics.
Some current products that customers have purchased may inevitably need to be retired. In these circumstances, providing customers and sales staff with the information early and in a positive way will lessen uncertainty and worry and provide a path to switching to other options.
Priority 5: Sales and channel execution
• How should our sales organization be set up in terms of assigned coverage and geographic regions?
• What is the new compensation or incentive model for sales, and how will it be explained and implemented?
• Which combination of channels is best for contacting customers?
• How will the proposed new model impact our partners?
The next important execution decisions center on how sales resources should be distributed and how external partners and channels may be employed to support them. It’s crucial to start with the identified market potential and defined go-to-market strategy once more.
The thread that ties everything together is customer segmentation, but each company has a different approach to doing it. Before conducting a merger, it is essential to understand which target categories are most important across the combined companies in order to decide how to allocate or redeploy the sales force to match the most important clients. They have a better chance of succeeding if they are deployed in the right market segment and given the right sales quota and incentives.
The experience of a life sciences company shows how taking sales concerns into consideration can increase deal success by reducing customer turnover and protecting base revenues. As it was in the process of acquiring a larger competitor with similar product lines, the business built a “clean room” for a team to assess the sales environments of the two companies and find crucial products and customers to fuel future growth. The “clean team” determined who it thought would make up the ideal customer and market segments for the united organization.
The go-to-market strategy and deployment plans that resulted from the purchase were swiftly approved by senior leadership with support from cross-functional and regional leaders. These programs included objectives for training and development as well as sales performance. A playbook was created to help the sales team focus on critical near-term opportunities, routinely communicate deal value drivers to clients, and keep an eye out for specific client risks. Furthermore, specific rules of engagement were set up to control circumstances where potential clients and sales teams might become perplexed, such as accounts where sales teams’ positioning for related products overlaps. This careful planning made it possible for the deal to close without creating any hiccups, allowing above-market revenue growth and the accomplishment of revenue synergy objectives.
Priority 6: Brand strategy refinement
• Which corporate brand and product associations do customers have, and which will resonate more strongly given the future strategy?
• How can the two portfolios’ and brands’ strength and power be increased?
• How do we intend to switch over to the new brand strategy? What particular marketing initiatives are necessary?
Branding must be taken into account at the corporate, product, and service levels. It provides clear signals to both consumers and staff and is among the first outward signs of a combined company’s strategy.
Despite this, decisions about brands are frequently taken in a hurry or under emotional or political duress.
The buyer may decide to keep one of the brands and structure their company around it, or they may decide to create a brand from scratch. Because brands underpin strong emotional ties with both customers and employees, the latter can be trickier than it seems. Therefore, major, public branding choices demand a thorough comprehension of what those clients’ and employees’ values. Does it make sense to choose one brand over another or to create something fresh in light of the deal strategy?
When two online travel service providers joined, the idea of using one of the names for the new company was considered. Extensive consumer research was done to identify which brand had the highest and most loyal levels of client awareness. In the end, though, the business chose to go with a completely different name that better matched its intention to expand away from historical markets—a new brand with significantly lower levels of consumer awareness but also less “baggage.” Customers and staff alike accepted the new identity, and the business successfully transitioned to its new brand.
Product and service strategy decisions are closely related to decisions about product and service branding. Choosing one brand over another shows control within the organization, making this choice one of the integration strategy’s most obvious manifestations. Understanding how much buyers care about the product brand is essential to making wise decisions. Another important factor to take into account when making branding decisions is how the workforce responds, in large part because what they think of the brand will strongly influence the route the business will go.
Priority 7: Customer service model
• How will we improve and maintain our service levels after the deal closes?
• In what ways does our service model need to expand to accommodate growth?
• Can we create a model for common services that supports the combined capability’s vision?
In the best-case scenario, a merger or acquisition can present a chance for the merged business to enhance its customer service. To keep consumers after a transaction and stop the deal from adversely influencing service, it can be essential to develop a comprehensive customer service strategy.
However, achieving these objectives can be challenging. The service strategies and capabilities of the combined companies may be very different. Different outsourcing models or overlapping or redundant contact center footprints and capabilities may exist. It takes work to comprehend how both businesses fit into the market when compared to the service skills and performance of their rivals. In some markets and deals, especially those that are consumer-facing, customer service is extremely crucial, and in those circumstances, implementation strategy should center on it.
As an illustration, the buyer of a software firm realized that the service model would play a key role in helping it fulfill its promise to customers. In order to implement this strategy, the company operating model had to be fundamentally rethought while ensuring that the customer service model could scale up and satisfy continued demand from cross-selling and up-selling. To support the integrated technology solutions produced as a result of the acquisition, the acquirer was forced to define a clear services plan that was closely tied to the sales strategy. To ensure consistent customer message and internal process alignment, this new strategy was shared internally via a services playbook. The objectives are to maintain its most valuable customer base and to promote a consistent customer service experience to support growth plan.
Priority 8: Defining customer experience
• How does the combined company’s customer experience stack up against industry standards?
• Does the acquisition offer a chance to improve something?
• In light of every aspect of the integration strategy, what modifications, if any, are anticipated in the customer experience life cycle?
Even little adjustments to a company’s product, sales, or service strategies might have an impact on the quality of client interactions with the combined entity. Understanding these changes and their implications for customers can mean the difference between high client retention and a sharp increase in customer churn. Knowing what these changes meant to customers and how they affected them can mean the difference between high customer retention and a sharp increase in customer churn. Several issues relating to the customer experience may arise from a deal. Customers could be given conflicting, ambiguous, or confusing information regarding the transaction and how it might affect the services or goods they offer.
Figure 4. Customer experience gap assessment (illustrative)
Relationships can be irreversibly harmed if all staff members who interact with customers are not appropriately trained to handle queries or new procedures.
It is necessary to assess each consumer contact point in order to prevent such problems. Understanding the actual “moments of truth” for consumers—those periods in the relationship life cycle that either enhance loyalty or lead customers to seek elsewhere—is essential to achieving this. To fully comprehend the effects of any suggested modifications, the integration team must put themselves in the position of a client. If the answer is yes, how should value be increased? If unfavorable, what mitigation strategies are required?
It’s quite improbable that all of the services, goods, and methods of consumer engagement will remain the same after any merger. In order to bridge the gap between the old and new environments, it is crucial to describe the characteristics of the new customer experience upfront, map prospective modifications, and figure out the best way to include customers (see figure 4).
A recent financial merger involved a major national institution buying out a smaller regional rival. It was well known that the target’s consumers valued the bank’s “community-focused” philosophy and had a strong sense of loyalty for both the company’s name and for particular branch personnel. The integration strategy called for switching to the acquirer model for all target processes and customer touch points (both digital and in-branch). This entailed several changes to how the bank communicated with its clients. To address this, detailed “journey maps” were made to walk through how suggested changes would feel and look to customers in various categories and specific research was conducted in the early planning phases to determine what was really essential to customers. This allowed the bank to validate that its customer-facing staff members were prepared to handle any potential issues and to create more targeted communications to meet the concerns of particular client categories. In light of the target’s strategies, it also revealed certain areas where the acquirer’s side may be improved.
Leveraging smart planning to forge solid growth and successfully fill in the gaps
Transactions involving mergers and acquisitions virtually always present good chances to generate cost savings and boost productivity. However, growth-oriented businesses shouldn’t fall victim to a short-term mindset and merely try to save their way to the deal success objective.
A disciplined approach built on a genuine comprehension of the actions and initiatives necessary to produce short- and long-term value is crucial for success in growth-oriented M&A. Companies can become high performers and realize the expected value of their growth opportunities by addressing the eight criteria listed above both early in the acquisition process and throughout the integration.
Exercise 4.8: ‘Shark Tank’
Course Manual 9: Target Communication
It’s crucial to communicate effectively with the relevant, impacted people at all stages of acquisitive expansion. Explaining the acquiror’s intention to combine its SWOT with that of acquired businesses to produce a synergistic and strategic advantages outlined in the Strategic Aspiration is incredibly useful for the acquiror’s organization and advisers. This makes individuals feel empowered and accountable, empowers them to participate in the solution, and so on.
The target company must be able to grasp and appreciate what a buyer contributes to their business and what it means for them, both of which are essential to the success of the post-acquisition period.
Boards of directors, investors, general employee populations, and other external elements must eventually comprehend this as well.
Communications in M&A: The glue that holds everything together
Clarifying the next steps in a merger, separating fact from fiction, and creating success for newly joined organizations all depend on structured communications.
By avoiding the distractions that frequently accompany mergers and might even hurt the current firms, structured communications play a crucial role in mergers. The communications strategy also establishes the framework for the future success of the united organization. One of the few merger workstreams that becomes “live” as soon as merger discussions start is this one. Following the deal’s announcement, the communications team works to create, involve, and oversee the strategy and execution of the merger.
By ensuring that the appropriate messages are conveyed and repeated to reduce employee worry, increase morale, and retain talent, a solid communications strategy and plan promote company continuity. Additionally, they communicate the future vision and strategy of the combined company to important internal and external parties, such as clients, authorities, suppliers, and staff. In this approach, the proposal increases support for the merger and dispels any rumors and misconceptions that could exist.
It is crucial to start early and get the message correct both before and after the close because the communications plan is a crucial instrument for informing and influencing stakeholders before transactions close.
The role of communications across the merger timeline
The work and focus of the communications effort ebb and flow throughout the merger process, reaching critical peaks at the announcement of the deal, at the transaction’s close, and on Day 1. Each phase in the merger time line has its own unique communications focus (Exhibit 1).
Exhibit 1
Design and ramp-up
The necessary people and infrastructure must be in place during the design and ramp-up phases. The objective is to nail the merger announcement by getting the fundamentals perfect because time is typically at a premium. The team will have time to polish the governance procedure and add members after the announcement.
One specific aspect of preparedness that should be included in a ramp-up plan is managing merger news and handling leaks. Given the amount of parties involved, the news may leak even if a merger or acquisition is a private procedure. It will be less stressful and time-consuming to have approved responses ready in case of leaks rather than having to rush to coordinate and rapidly approve statements from both parties.
Announcement
This is the first chance to explain to all parties involved the goals and principles behind the merger. The success of this phase will greatly influence how long the honeymoon period for the merger lasts. A clear explanation of the strategic objective serves as the foundation for several messages intended for customers, suppliers, regulators, and other audiences. These all represent the primary objective, which is to guarantee that the proper message regarding the merger is continuously disseminated.
Pre-close integration planning
Following the merger announcement, the pre-close period necessitates extra consideration. Competitors are vying for your clients at this time, and top talent may be debating whether to stay or go; some may interview but delay leaving until the end.
To minimize harm to the company, regular communication with customers and staff is essential during the pre-close period. Companies commonly commit the error of “going dark” and communicating very little or nothing between the announcement and Day 1. Another common error is avoiding serious issues and instead providing “happy talk” or corporate prattle that is designed to console but that nobody actually believes, with the possible exception of the leaders. Communications ought to be sincere and open. Direct communication of challenging messages is valued by employees.
The leadership team should use this opportunity to solicit feedback, pay attention to it, build on what’s working, and, where required, make corrections.
Day 1
Day 1 is a moment to celebrate the union of the two organizations as well as to provide important stakeholders with direction and clarity. The most important thing is to let the staff know what is changing and what isn’t. Too frequently, we hear about workers who don’t know who their new managers are or what procedures to follow on Day 1. An organized communications strategy is essential for making sure that staff members are well-informed and prepared to work efficiently right away.
The communications team should plan town halls and webcasts to ease the transition as well as make sure the appropriate leaders are present on Day 1 and during Week 1. Additionally, it is a good time to organize a road show for important clients and to send out emails to a larger clientele, emphasizing the commitment of the new business to them. Additionally, it’s crucial to inform vendors of significant changes and to keep them informed even in the absence of changes in order to guarantee continuity of supply.
Integration implementation
When a transaction closes, the communications team’s work is not finished. In actuality, subsequent communications tend to be more frequent. To make sure that changes are understood and accepted, it is crucial to send precise messaging about significant decisions (such the location of the corporate headquarters or additional organizational transfers) in addition to the normal cadence of integration communications. It’s crucial to notify stakeholders, including customers and vendors, when important changes will occur. For instance, customers should be informed of any changes to product portfolios and systems, as well as process changes (such as the implementation of a single ordering system). Vendors should also be made aware of any modifications to the payment conditions.
Six steps to building and executing effective merger communications
To create, carry out, and continuously assess and enhance merger communications, a six-step procedure is required (Exhibit 2). These actions shouldn’t be considered “one and done.” They are typically iterative and frequently need to be improved as the leadership and communications teams pick up lessons from the various merger phases, receive feedback on the first communications, and as the communications requirements change. Even though a business can never be completely ready, this methodical approach considerably increases its operational rigor.
Exhibit 2
1. Identify key stakeholders
There are many different parties involved in mergers, and each group needs a unique strategy and message. Stakeholders can be broadly divided into two categories: internal and external.
Investors, who must be convinced of a deal’s advantages, and analysts, who anticipate management to provide the deal’s strategic and financial case, are examples of external stakeholders. Retaining customers requires assuring them of service continuity. The implications of the merger for vendors are something that they are eager to learn about. Government officials and regulatory authorities are worried about anticompetitive behavior and job losses. Finally, opinions regarding whether the merger is good or negative will swiftly emerge among the broader public.
Employees of the two merging organizations make up the majority of internal stakeholders, yet different groups within them have varied needs. A well-thought-out plan makes a distinction between general employees, high potentials, and employees in danger of quitting (and customizes communications for each group). Particularly careful planning and frequently legal guidance are needed for communications with unions or workers’ councils. Any prospective benefit modifications will notably interest the retiree population.
Employees are a key group of stakeholders. They must be enthusiastic about and committed to the new company’s vision. However, they must first comprehend what will happen to them before they may travel there. They are debating a number of issues. “Do I have a job now?” “Will I still have a job in the future?” “To whom shall I report?” “Do I belong here?” you could ask. It will probably be counterproductive to talk to employees only about the bigger picture before addressing their individual circumstances.
High potentials and important personnel must be included in the communications plan without a doubt. In a recent merger, strong performers were nurtured through focused communications and leadership time, which included one-on-one conversations about potential career routes between them and the leadership. This set of workers, who frequently leave first, experienced substantially lower attrition than anticipated.
2. Identify the main milestones and trigger events
The communications workstream gets started right away during the merger process, and it rarely slows down. A good communications strategy identifies key dates like Day 1 and key triggers like the declaration of new leadership. The intention is to focus the majority of time and effort on the tangible events while also ensuring that regular updates are provided.
The communication focus should be agreed upon by all important decision-makers. This makes it more likely that leaders will commit to carrying out the merger’s vision successfully. Additionally, alignment facilitates and clarifies the discussion of who will be doing what and when.
The integration-management office (IMO) and the communications team recently evaluated a checklist of all potential merger milestones and immediately determined which ones were most pertinent. Organizational announcements, such as the top-level structure and leadership appointments—the topics that worried employees the most—were given a lot of attention. The team gained much-needed focus and direction as a result of syndicating and achieving agreement on these concerns, which helped it carry out the plan successfully.
3. Set up governance and resourcing for the communications team
The communications team and integration leadership should establish a clear governance mechanism and define roles and responsibilities in addition to allocating resources. Four roles are frequently present:
• The integration steering group serves as the final arbiter on all matters that cannot be resolved elsewhere, reviewing and approving the overall strategy for merger communications as well as messaging to critical stakeholders.
• The integration leader evaluates the overarching communications-activity strategy and gives his or her approval for the material’s distribution.
• The integration leader and the communications leader collaborate closely to design, establish, and carry out the plan. The communications leader oversees the communications workstream. The communications leader also identifies the appropriate internal and external resources to direct the creation of content.
• In close collaboration with functional leaders and outside partners, the communications team creates and distributes the content recommended by the communications-activity plan.
Well-defined governance—a procedure for approving and disseminating communications—is necessary for timely and effective execution. The two communications teams collaborated extensively to establish the process in a recent cross-country merger. At least one week before it was to be sent, the communications teams created their content. They pledged to distribute content to the legal team, the integration leader, the relevant functional leaders, and the leaders of communications for assessment and approval. The procedure was designed to be completed quickly, with precise deadlines and the assurance that only the appropriate individuals—and a small number of individuals—were participating in the approval process.
4. Develop core messages and a ‘deal narrative’ to anchor all communications
The employee value proposition (EVP), the associated change story, and a set of core messages derived from the deal’s justification should serve as the foundation for all communications during the integration period. The underlying justification for a deal and its value-creating factors are articulated in the rationale. The EVP explains why the future is promising as well as what the agreement means for the staff. The change story, which paints a clear and compelling picture of what has to be done and why in order to realize the deal’s full potential, indicates that the merger departs from “business as usual.” The key messages are further tailored to each stakeholder group. These core messages should be emphasized throughout all conversations.
One of the most crucial decisions a CEO and the C-suite can make is to create a convincing set of fundamental messages that are based on the logic of a deal. The communications team can begin the process of developing the core messaging by either holding a workshop with the executive team to develop a single, cohesive narrative for the company, or by conducting a thorough, organized interview with the CEO (to clarify the vision and values). Regardless of how businesses create the first idea, the fundamental messages need to be evaluated and improved within the organization to make sure they are appealing to varied stakeholders.
5. Develop the step-by-step plan for each milestone
In a recent merger, the communications team worked closely with the IMO to develop a thorough communications plan (the merger’s “who, what, when, why, where, and how”); the team was well respected by C-level executives in both organizations. The team adopted the same strategy and project-management tools as the other workstreams involved in the merger (such as IT). The plan covered the main milestones and target events, as well as regular updates to various groups, and it pulled together all merger communications from all parties. Additionally, all deliverables were described in depth, including the audiences, owners, deadlines, necessary preparation times, methods for content review, and interdependencies.
To reach their target audiences and make sure that messages stick and are reinforced, communications teams should leverage a wide range of channels. Choosing the appropriate channels for each deliverable is a crucial step in creating the communications-activity strategy. Social media is becoming a more important component of this, particularly for involving clients, consumers, and the general public.
6. Establish two-way communications—monitor, gather feedback, and adjust
To make sure that messages are understood as intended and that gaps are identified and properly addressed, two-way feedback channels must be established. Communication efforts in this regard frequently fail. Either little attempt is made to solicit feedback, in which case employees in particular feel that they are being lectured to, or the feedback is not acted upon, which may be much worse. Many tools, including pulse surveys, integration barometers, town hall meetings, focus groups, and website or email feedback, are used in an effective feedback-collection process. After gathering all of this information, the communications team and the IMO evaluate the feedback and implement the necessary changes.
The feedback process can be aided by what Mckinsey&Company refers to as “fire spotters”—respected personnel who perform the influencer function within organizations. It is quite beneficial to hire these workers early on and enlist their assistance in gathering feedback. They also act as a respectable means of responding to the criticism. A few of fire spotters rapidly picked up on an imminent wave of attrition in a recent merger. Given the warning, the integration leader and senior leadership could use a combination of nonfinancial and financial levers to take emergency action. Although the wave wasn’t stopped, the corporation greatly reduced the integration barrier.
Putting a structured merger communications plan in place
We’ve discovered a few best practices that are essential for creating a planned merger-communications strategy are listed below.
• Focus on business objectives. Energy should be directed to protect and build business value.
• Start early and tailor. Messages should address the stakeholders’ evolving needs. If you cannot communicate decisions yet, explain the process.
• Govern tightly. Executives should be directly engaged through clearly defined roles and processes.
• Be conscious of culture. If, for example, bottom-up thinking is part of the core culture, top-down messaging may not land as well.
• Be consistent and compelling. All communication should be of high quality and repeatedly reinforced in multiple channels. Communicate five times more than you think you need to.
• Humanize the message. Address what people really care about, in a tone that is responsive to the mood and situation, not overly formal and legalistic.
• Animate your leaders. Actively align leaders, middle managers, and customer-facing staff so that they communicate effectively and consistently. Do not outsource this work to the communications function.
• Stay up to date. Keep the IMO and the deal team and major workstreams connected, so that information is up to date and that communications are as proactive and effective as possible.
• Be responsive. Collect and respond to feedback regularly and quickly.
Due to other pressing needs, businesses frequently place a low priority on the merger-communications plan. Some choose to completely outsource the task to the HR and communications departments, which is a missed chance for the integration team and executive leadership. With the assistance of senior leadership, a disciplined focus on and investments in communications have been proved to produce substantial benefits, including a motivated employee base and engaged vendors, partners, and other stakeholders who all support the success of the newly established company.
How are communications in mergers and acquisitions different to standard internal communications or change communication?
Basically, M&A involves a minimum of three organizations (parties) at once. The current acquirer and the acquiree, each of which faces unique internal communication issues, are the first two, and the combined organization’s future vision is the third.
Whether the deal is an acquisition, a real merger, or a reverse takeover determines how those three are related to one another. The main distinction in internal M&A communication is that you must always be aware of which of those three organizations you are corresponding with.
A shallow ‘integration’ where the communications are merged before the organization is what some acquirers may seek to rush to too hastily. This causes a gap that may be troublesome both internally and externally since the appearance and feel of the transaction outrun the actual realities. Effectively balancing these three parties calls for a high level of political and strategic aptitude, both from a consultancy and internal dynamics standpoint.
Why internal communications are important during mergers and acquisitions
Employee loyalty and trust are at stake.
The loyalty and trust of a company’s employees are directly impacted by how it communicates during a transaction. When a company’s actions and statements are inconsistent, employees frequently lose faith in the business.
Company executives and other internal communicators can lessen the negative effects of a merger or acquisition by developing a proactive communications strategy because staff members frequently feel caught off guard when a deal is announced. A timeline for announcements should be created, spokespeople should be appointed or informed, and the communications team should prepare messages for specific audiences. A backup plan should also be in place in case something unexpected happens. It would be expensive to lose employee trust.
Tip
Be as open as honest as you can. Instead of sending out light messages during this time, concentrate on providing the answers your staff members are seeking. They are concerned about how this approach may impact their existing job objectives, professional values, office space, and work schedules.
Your best employees can leave at any moment.
Employees at both organizations want to know what adjustments will be made and when because they are worried about their job security and obligations. Executives may find it challenging to be open due to legal requirements. However, if management blithely declares that “nothing will change” in an effort to keep workers motivated, trust will be harmed when things do, in fact, change.
Many workers will decide to leave if they are misinformed or lied to, even accidentally. One reason M&A agreements fail after acquisition is because of a mass exodus of talent.
Inform your finest staff as soon as possible to stop them from quitting. Deals can be discussed in a variety of ways without revealing confidential or misleading information. Being honest about the fact that you lack particular information is also important; for employees, hearing “I don’t know” is frequently more reassuring than wild conjecture.
Company culture is at risk.
Whether you like it or not, a transaction will have an impact on your company culture. M&A agreements frequently fall through when two organizations’ beliefs and values do not align, or when there is a “culture clash.” Deloitte claims that “Culture is inextricably linked to performance, especially in an M&A context.” “The question is not if — but how — companies should manage culture to safeguard the value of an M&A deal.”
Work to create a unified culture to reduce a clash of cultures between two merging businesses. To communicate the mission and values of the recently joined organization, your communications teams should develop a strategic strategy. The same messaging should be used by company executives, spokespeople, public relations teams, and marketing specialists. One of the keys to bringing a corporation together is consistency.
Post-acquisition success is challenging to achieve.
M&As can be drawn-out, challenging procedures. Employees may experience major effects from these transactions, such as increased stress, worry, and uncertainty. Internal communicators must keep the momentum going after the sale closes, reduce cultural misunderstandings, and boost employee morale.
Merger and acquisition failure rates typically range from 70 to 90 percent. Deals are still completing, but they are concluding without producing the outcomes stakeholders are expecting. The integration and development of value after a deal is completed depends on frequent and transparent communication. After the transaction is signed, don’t forget to communicate more frequently and earlier.
Thomson Reuters’ Internal communication strategy – #dare2disrupt
Thomson Reuters found themselves in a bit of a rut when there wasn’t enough importance on innovation and the challenge they faced was getting their employees to fall in love with innovation. That’s where they formed the #dare2disrupt campaign which was aimed to get the business comfortable with innovation.
They tried a handful of internal communication tactics – regular team lunches, inspiration sessions, startup bootcamps, innovation challenges and more. By implementing this campaign, they’ve already seen an upturn in the number of requested innovation projects which suggests their internal communication methods helped to get their 50,000-plus workforce to buy-in.
Communication mistakes to avoid during mergers and acquisitions
A firm’s employees’ loyalty and trust, employee retention, company culture, and long-term performance are all at risk if it fails to communicate effectively during a merger or acquisition. During an M&A, effective communication is essential for four reasons:
1. Frequent communication reduces uncertainty and maintains a trusting relationship with employees.
2. Proactive communication eases concerns about job security and helps retain valuable employees.
3. Intentional and consistent messaging cultivates a unified company culture.
4. Open communication facilitates post-deal success and long-term profitability.
Keep your staff as informed as you can whenever a merger or acquisition deal is being considered to assist ensure that your M&A is one of the 10 to 30% that is successful.
What we can learn from the Alcatel and Lucent merger
Reason for failure: Poor communication as a result in the clash between two corporate cultures.
Lets discuss the 2006 $13.4 billion merger between two telecom companies — Alcatel and Lucent. The former was a French leader in fixed line and broadband services, the latter was a US wireless provider spun off from AT&T in the 90s.
In theory, the collaboration appeared to be promising. Together, the two corporations may build an international telecommunications powerhouse to compete with Chinese networking providers like Huawei Technologies. However, by 2008, Alcatel Lucent had suffered six quarterly losses, $4.5 billion in write-downs, and a halving of its share price.
Cultural concerns surfaced once more. Lucent was significantly more centralized and hierarchical, and preoccupied with cost cutting; Alcatel had a far looser organizational structure and emphasized marketing more than their American rivals. Furthermore, language was frequently a barrier.
As a result, Nokia paid $15.6 billion to acquire Alcatel-Lucent in 2016.
Exercise 4.9: Guess Who?
Project Studies
Project Study (Part 1) – Customer Service
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 2) – E-Business
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 3) – Finance
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 4) – Globalization
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 5) – Human Resources
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 6) – Information Technology
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 7) – Legal
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 9) – Marketing
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 10) – Production
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 11) – Logistics
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Project Study (Part 12) – Education
The Head of this Department is to provide a detailed report relating to the Targeted Offerings process that has been implemented within their department, together with all key stakeholders, as a result of conducting this workshop, incorporating process: planning; development; implementation; management; and review. Your process should feature the following 12 parts:
01. Product Offerings
02. Service Offerings
03. Talent & Human Capital
04. Transferable Capabilities
05. Channels to Market
06. Brand Platform
07. Scope Vs Scale
08. Map the ‘Gaps’
09. Target Communication
Please include the results of the initial evaluation and assessment.
Program Benefits
Marketing
- Sales models
- Business growth
- Business strategy
- Customer loyalty
- Enhanced performance
- Improved responsiveness
- Opportunity analysis
- Supplier evaluation
- Corporate goals
- Market analysis
Management
- Engaged workforce
- Increased trust
- Heightened teamwork
- Productive meetings
- Idea generation
- Increased revenue
- Role clarity
- Role distinctions
- Tasking formula
- Effective communication
Finance
- Cost-effective
- Return on investment
- Budget friendly
- Financially sustainable
- Profitability enhancement
- Self-financing
- Performance improvement
- Cost savings
- Controlled growth
- Calculated risk
Client Telephone Conference (CTC)
If you have any questions or if you would like to arrange a Client Telephone Conference (CTC) to discuss this particular Unique Consulting Service Proposition (UCSP) in more detail, please CLICK HERE.