Insight

Are you harnessing the innovation and growth potential of disruptive M&A ?

 

The shapes of established business models are changing at an increasing pace across traditional industries. Customer preferences and beliefs change, and new ways of working emerge on the back of the pandemic. This evolution is increasing the need for rapid innovation, as value chain decomposition and technology alter the proximity to customers and create new competitors.

M&A is increasingly applied to capture innovation-led growth, as companies tap into shifts in technology and consumer behaviour, with a view toward the future landscape of their industry. Disruptive M&A is about acquiring a capability, technology or access to a new market or ecosystem, which makes it possible for your company to develop value propositions, that will either change the basis of competition, will be new to the industry, or create new markets.

There is a catch, however. Disruptive M&A is inherently complex. Selecting the right Disruptive M&A opportunities requires evaluating and assessing a much broader range of possibilities and targets than traditional M&A—options that may fall outside of your field of expertise. Disruptive M&A targets are valued and analysed differently, Disruptive M&A transactions are executed faster, and Disruptive M&A acquisitions require a very different set of integration models.

Key questions to ask in your disruptive journey:

  • Which forces—such as new technologies, changes in consumer behaviour, and evolution in our competitive landscape—are most likely to affect my industry?
  • Do we have an adequate understanding of these forces?
  • What options do we have to get ahead of these forces?
  • Do (or should) these options include investment, partnership, or acquisition components?
  • How do we identify and assess the various inorganic growth options available to us?
  • How should we approach and execute this deal differently from past transactions?
  • How do we position ourselves to be an attractive acquirer to disruptors and innovators?
  • How do we extract value from an innovator that we are acquiring?

Harnessing disruptive M&A as a vehicle for innovation and growth can make your company the disruptor. But only if you are able to approach M&A in an unusual way.

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