M&A Strategy

Achieving sustainable growth and optimising your portfolio are paramount for long-term success In today's dynamic business landscape. At Deloitte, we understand that navigating this terrain requires a structured approach, one that balances your organisation's unique strengths and aspirations with the ever-evolving market dynamics.

These are the key steps that characterise our approach:

1. Develop baseline: In the initial phase, our team works closely with your organisation to create a strong foundation for growth. We start by understanding your company's strategy and conducting comprehensive analyses, both internal and market-focused. This step results in a clear articulation of your existing financial and non-financial growth ambitions, along with an inventory of core capabilities and strategic assets. We also conduct a thorough market scan to grasp industry shifts, competitive dynamics, and sources of disruption. This baseline assessment allows us to identify areas of strength, opportunities for improvement, and potential strategies to address gaps and opportunities.
2. Identify growth platforms: Building upon the baseline, we move forward to identify growth platforms that align with your strategic goals. We generate a list of potential opportunity areas and meticulously analyse each one, considering factors such as strategic alignment, financial potential, and feasibility. The highest potential opportunity areas are then prioritised and clustered into growth platforms. These platforms are rigorously evaluated based on criteria such as their alignment with your current portfolio, financial potential, and risk factors. Ultimately, this step results in a prioritised list of one or two options for transaction pathway development, guiding your company toward advantaged portfolio expansion.
3. Create and execute transaction pathways: In the final phase, we dive into the specifics of M&A target areas. Our team compiles lists of potential targets within the priority opportunity areas, establishes target evaluation criteria, and filters targets to create a shortlist. We then develop transaction pathways for each growth platform, outlining the steps required to achieve your strategic objectives. Additionally, we create detailed target profiles, covering aspects such as capabilities, availability, pricing, and financial performance. This step equips your organisation with M&A opportunity profiles and scorecards, enabling informed decision-making and effective execution of growth strategies.

Today organisations are facing a myriad of challenges, from the ongoing impact of the COVID-19 pandemic to the uncertainties of rising interest rates and ever-evolving market dynamics. To navigate these complexities successfully, businesses must adapt, innovate, and ensure their strategies are not only resilient but also aligned with their objectives.

Key steps for the strategic operating model assessment include:
 

1. Defining strategic objectives: Start by clearly defining your organisation's strategic objectives. This involves determining where you want to compete, how you plan to excel, and the business models you intend to employ. These strategic decisions significantly shape the design of your operating model, influencing aspects such as target customer segments, distribution channels, pricing strategies, and delivery mechanisms.
2. Identifying critical capabilities: Identify the key capabilities required to achieve your strategic objectives. This includes both existing capabilities and potentially new ones, spanning front, mid, and back-office functions across various product lines. These capabilities collectively generate value and drive the organisation toward its strategic goals.
3. Efficient capability sourcing: Determine how to source these critical capabilities effectively. Choices include developing, transforming, or enhancing capabilities internally, acquiring them through talent acquisition or mergers and acquisitions, forming partnerships, or selectively outsourcing certain capabilities. The chosen sourcing methods should align with your strategic objectives and considerations including speed, control, customisation, competitive advantage, and operational efficiency.
4. Optimising work allocation: Ensure efficient allocation of work within the organisation. Assess whether each capability provides demand-side or supply-side advantages and how closely it aligns with your core business functions. These assessments inform decisions about where and how to configure capabilities within the operating model.
5. Continuous model enhancement: Recognise that operating models are dynamic and must evolve over time. Implement cross-functional processes, targeted incentives, and advanced tools to promote simplicity, clarity, and agility in execution. Regularly evaluate the performance of your operating model components and make necessary refinements to stay aligned with your strategic goals and adapt to changing business conditions.