Whether the disruptive scenario is one involving a great upside or a significant downside risk, it has to be included in the acquisition evaluation and plan. This evaluation and plan must start with self-examination on the part of the acquiring firm. The acquiring firm must ask if it is the "right firm" to implement such a strategy. It must ask whether there are reasons why it is better positioned for success than are others (e.g., expertise in the market, synergy through existing operations, core competencies that are transferrable, assets that can be leveraged). It must ask if the required business model changes are practical in terms of its demands on resources (financial resources, human resources, etc.). It must assume competitors will react, and decide if their reactions can be thwarted in order to ensure the pro forma forecasts associated with the strategy are realized. Far too often, the acquisition decisions and business case assume a "steady-on-course" future for the acquired company, when the reality in fact involves significant change, disruption, and requirements for investment of time, money and expertise.
Behind the Wheel
Driving merger and acquisition successes in 2011