Join Anil Gupta for an in-depth discussion in this video Growing through acquisitions, part of Designing Growth Strategies.
- Acquisitions are one of the three mechanisms…through which a company can fill the capability gaps…when deciding how to enter new market spaces…and grow the business.…The other two mechanisms…are building the needed capabilities from scratch…or getting access to them via strategic alliances.…As examples of the role of acquisitions…in helping a company grow, look at Google,…Android and YouTube.…
Started out as units of Google via acquisitions.…Similarly, Facebook has expanded its share…of the social media space by acquiring several companies…including Instagram and WhatsApp.…Notwithstanding the importance of acquisitions…as one leg of a company's growth strategy,…research tells us that the majority of acquisitions…fail to create shareholder value for the acquirers.…
The reasons are twofold.…Acquirers often overpay for what they buy,…and they mismanage postmerger integration.…What should a company do to avoid overpaying…for an acquisition?…The answer lies in being driven by logic…rather than ego and strategic clarity…
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- Recognize the problems a company may encounter if it does not achieve growth.
- Identify high-potential opportunities for growth.
- Identify new customers for existing products.
- Use assessment screens to choose the best opportunity.
- Evaluate partnerships and acquisitions as mechanisms to fuel growth.
- Break down the components of an effective and growth-minded leadership team.