According to
AT Kearney there are several reasons to merge companies. Most often the driver is to increase market share or increase regional footprint. But why do mergers fail, though they have a serious driver?
Recently
AT Kearney reported about failing mergers. In this intriguing report they give a number of reasons for why a company should want to merge. They call it merger types:
- Improve the products and services offering.
- Increase the regional footprint.
- Improve the value chain structure.
The actual aspect they want to improve are:
- Increase the market and sales share, and improve the profitability.
- Increase innovation.
- Diversify risks.
Most important drivers are market share improvement and increasing the regional footprint. These facts give an interesting background why companies want to merge. But though the drivers are worthwhile, still they fail. Now why is that? Again a number of reasons:
- The sequence of activities, and the adaption of the integration speed.
- The integration of selected value chain paths.
- It takes too long before the integration completes.
The last one is most important. Now if I try to understand these failing causes I think I should call it '
less is more'. In my blog
Reduce Complexity and Rise Your EBIT! I pleaded for the importance of doing the right things, which in my opinion is much more important than doing the things right:
Effectiveness prevails above efficiency!
Other blog on
mergers and acquisitions:
Mergers Miss Consolidation Deadline Required By Law!
So, how do you plan your mergers and acquisitions? We value your opinion: Let us discuss! Share your opinion with other members of the
Results2Match Community!
Results2Match has a strong vision on
strategy, and how to link strategy to performance! We deliver results!
This blog is written by
Hans Lodder. Hans is a very experienced change management consultant and interim manager. You can contact Hans through his
Results2Match email address.
