Mid sized and large companies look to inorganic growth model for giving their business a upward push in a geography of their choice. The approach of large and mid sized companies to inorganic growth is often different. Mid sized companies look to immediate revenue accretion as the goal while larger ones have a more strategic view towards making investments in another company.
Strategic alliance building could be opportunistic and restricted to achieve a limited objective of acquiring or executing a particular deal or project. Pure play strategic alliance seeks to achieve long term business growth for both companies or in case of acquisition to the acquiring company.
Inorganic growth models require the consultant to not only have a good network in the industry but also has domain understanding of the sector. This is critical to company finding- perhaps the first critical step in inorganic deal making.
Pure play chartered accounting, legal and strategic consulting firms are not ideally suited for company finding and preliminary due diligence. As discussions move ahead specialist accounting and legal firms can be brought in to perform specific tasks aimed at formalizing a strategic model agreed by both parties.
Inorganic deal making requires conjuring a win win situation for all parties. The inorganic growth path is best taken by mid sized and large companies. This deal making is generally done under the radar and confidentially.
Most of these engagements are result linked with a small upfront consulting fee aimed at covering initial travel, board and office maintenance cost of the consultant.
Monday's blog will be on securing pure play investments into a company.
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