3 Buying vs. Building Questions

Three essential questions can help companies determine when buying rather than building makes sense for them:

  1. Does someone else have a capability that would enhance your business? There are many different kinds of capabilities-technologies, sales channels, operations in particular geographic areas and so forth. If no one else has the capabilities you need to strengthen or adapt your business, you obviously have to grow them yourself.

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M&A Capabilities Fit Questions

  • What is unique about the target company´s capabilities system? How does this company create value for customers?
  • How does the acquired company´s capabilities system differ from our own?
  • If we are buying the company for its product and service portfolio (a leverage deal), are we sure that those products and services will thrive within our current capabilities system?
  • If we are acquiring the target company for its capabilities

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Should Sales Forces be Combined?

  • Will overall sales strategy – as well as individual company and product strategies – be enhanced by an integrated sales force?
  • Is there a large overlap among potential customer segments?
  • Do companies market products to common customer segments?
  • Do the products require similar types of sales skills?
  • Does the sales force contact the same type/level of decision maker?
  • Are customers generally amenable to the merger?

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