Outsource a Core Competency?

Abstract

The M&A world has learned the importance of conducting in-depth legal and financial due diligence, yet many acquisitions still fail to live up to expectations. The most common reasons actually relate to flaws in the business strategy of the acquired company rather than tangible shortcomings that the accountants and lawyers can identify. Broadening the scope of due diligence has turned out to be the answer for many private equity investors. A structured process of evaluating the business strategy of the target company improves the chances of any acquisition's success. Outsourcing is often required to diligently analyze the positioning of the target company relative to market dynamics, competitors’ strategies, management capabilities, customer needs, and brand perceptions.