M&A, divestitures, and industry landscaping
M&A deals and divestitures can drastically alter the dynamics of an industry. In addition to factors that affect the parties directly involved — i.e., potential operational synergies, financial issues, etc. — one should not ignore possible reactions on the part of other players, such as competitors or market regulators, based on their individual objectives. Often, there is a strategic and long-term interest in these moves. Examples include buy-and-build strategies or, as in landscaping exercises, the need to understand where waves of acquisitions may take a certain industry. Thus, analyzing the complex interplay among all relevant stakeholders should be favored over a pure focus on the parties directly involved, limiting attention to internal perspectives only.
Regarding such issues, our approach is particularly useful in the early stages of planning M&A, divestitures, or industry landscaping. Ideally, acquisitions are not driven by opportunities but by a plan or strategy.
Selected cases: M&A, divestitures, and industry landscpaing
Defining a future strategy, positioning, and product specification for a vehicle's new value-added service
Our client was a major car manufacturer (OEM) designing a specialized value-added service intended to be both profitable on a standalone base and, at the same time, support sales. Due to the special requirements, partnering options with technology enablers were evaluated.
We helped the client team find the best options for product features and positioning, both considering the reactions of established players and assessing risks and opportunities from entries into the industry, including a realistic assessment of the industry landscape to come.
Strengthen own market position despite facing multiple disruptives
In a highly competitive chemical market, our client was an established global supplier who faced multiple potential disruptive elements: potentially upcoming political regulations in the world’s biggest market segment; the possible entry of two new suppliers; rumors about shut-downs of some unprofitable smaller suppliers; and technological innovations that would create various new product applications and change customer demands drastically. With our analyses, we helped our client to identify the most impactful of those disruptives, to understand their interplays, and to develop a suitable action plan how deal with them best.
Market consolidation strategy
In a business characterized by significant overcapacities and low price levels, our client was confronted with excessive and seemingly irrationally aggressive competition by two Asian competitors. The client and a second western competitor were victims of long-lasting aggressive behavior stemming from personal feelings between the Chinese companies. Together, the team developed a plan to resolve the issue using M&A, avoiding maximal confrontation or, as an ultima ratio, leaving the market.