The Right Sort of Partner is the Key to a Successful Merger

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Ever heard of a merger that failed? We have heard several such stories, each with extremely disappointing endings. Do you know why they happened or why things did not work out the way they should have? We will tell you why; many mergers fail only because the involved businesses do not choose suitable partners.

Many times it happens that you come across a company that appears to have attractive qualities and you become interested in a merger. During the process, you fail to realize that there are other characteristics as well that can actually overshadow the positive ones and drive the merger towards failure. But when the deal is made, they are seemingly not important and so are often ignored.

Once the merger is over, that is when you realize the mistake. Unfortunately, there is no turning back at that time. You have already merged, and somehow you have to let it work out, whether you like it or not.

A merger results only after efforts and time have been put in, not to mention the money. The error is regarded as quite costly, and you should really avoid it.

In previous times, there were not many risks involved with mergers and acquisitions. The prime aim was to grow the company and get a bigger share in the market so as to gain a competitive edge. This could be achieved by merging with small companies that were doing well in the same sector. The approach was effective because the business did not have to undergo any dramatic changes. The existing customers could be serviced just as in the past; expansion had no effect on this. As for the new customers, they got to enjoy a bigger and a better brand.

Consider the last decade, and the above does not hold true. Why? Because now goals have changed and so have strategies. Should the market become volatile, size gives no added advantage and smaller business are actually at an advantage. Today the main focus is to target those companies that can help achieve a higher product quality, a speedier delivery or increased customer satisfaction, and all of this at reduced costs. Initially, the idea of a merger may seem perfect, but later on, cultural differences can arise, and that is when trouble starts, which makes integration really difficult.

The only solution? Make sure you merge with a company to which you can adapt well.

Source: www.bizjournals.com

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