Growth by acquisition

Question

In my experience, companies who grow through acquisition vs focusing on organic growth are seen as ‘old school’ with large ambitions that are poorly executed because of the complexities of truly integrating the business and leveraging it for the mutual benefit of the entire portfolio.

Is growth through acquisition typically seen in negative light because it indicates creative bankruptcy regarding organic growth for the core product, accompanied by a measure of hacking & slashing within the newly acquired org? Or, is this just my takeaway based on what I’ve seen and heard?

Accepted Answer

In my experience acquisition by PE was never a good thing. Mass layoffs always occur after, which also kills culture and reputation.

Answer

It’s very company and industry dependent.  From a business standpoint it makes sense sometimes as it can be a quick way to grab market share, fill a product portfolio or market coverage gap, and even gobble up competition.  From an execution standpoint it’s always tough to transition the acquired company from ‘their way’ to ‘your way’ and employees always get caught in the middle of that.

Answer

Yes.

Answer

M&A can be an awesome growth path for many businesses. The issue is that a lot of them are done wrong.

Answer

Getting acquired by a tech giant killed the culture at my previous org. Drove all the good people away.

Answer

It’s the guy vs build mentality. It makes a lot of sense to buy, hence why some of us have jobs, rather than build it internally.

Answer

"it depends" - Jeff Kinsler, Professor of Law, Belmont University

Answer

Not a simple answer here. Innovation is key to growth, but sometimes there's a solution already out there that can springboard a company faster than they can build it themselves. So many factors contribute to whether any of these acquisitions are a success, or ultimately a failure. Executive leadership definitely needs to have a vision so that acquisitions are meaningful.

Answer

Cvent is a great case study for this, their entire business was grown through acquisitions.

Answer

I mean if the companies are equal in size, its better to be organic, However there is a situation where acquistion can be better

CadenceCombat

Growth by acquisition

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CadenceCombat

Growth by acquisition

16 comments

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