Saturday, April 23, 2011

Most Acquisitions Are Optimized For the Short Term

There's Only so Much that you Can Squeeze out of a Sponge

For clients who have grown by acquisition I've noticed a common short term thread.  While adding revenues [maybe only for a while] from the newly acquired customer base, they also do well at reducing redundant overhead costs.  But this initial low hanging fruit won't produce a sustainable boon to the balance sheet, cash flow or income statement.

Many "acquiring companies" minimize long-term results by following financial or operational paths. They do not assimilate these acquisitions into a unified marketing environment by allowing original sales, marketing and customer service processes to continue as if the newly acquired business was still an independent entity.

Is short term thinking the path of least resistance or does the acquiring company lack a strong marketing culture along with proven sales, marketing, support and business development processes?

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