The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
As the world becomes more globalised and the competitive landscape more crowded, mergers and acquisitions are being leveraged to grow market share and create more value for shareholders. At the root of any merger or acquisition is the prospect of synergy, benefits of which include new or improved business intelligence, reduced overhead, an increased customer base, or reduced competition, to name a few. Synergy, however, is much easier in theory than in practice. Comprehensive market research is a great tool to combat uncertainty and promote long-term synergies. It can be used as a way to inform both pre-acquisition due-diligence and post-acquisition optimisation.
Much work needs to be done prior to approaching a company to discuss a potential partnership. While many businesses utilise services from investment banks or similar firms, it is not uncommon for businesses to also leverage market research during the pre-acquisition process. Thorough pre-acquisition research includes identifying all whitespace opportunities, creating a long list of potential partners and profiling key targets in order to select the “best fit” partner.
When first assessing options for partnerships, it is important to have a thorough understanding of not only your existing categories, but also all adjacent categories and industries around the globe. A holistic view of the global market will ensure that you have considered every option with a deep understanding of how the landscape is expected to change over time. One way to identify whitespace opportunities is by leveraging tools that allow you to see what categories have positive or negative sales correlations.
After identifying your top whitespace opportunities, create a “no company left behind” list of key targets. Brand and company market share breakdowns allow for better identification of the major competitors leading the market and if there are companies leading any niche sub-categories where larger competitors are not present.
Market research is an important tool in understanding your short list. Company background/accessibility, growth, scale and profitability are four key pillars when examining potential targets. Market insight plays a heavy role in both company scale and company growth, as it can inform everything from the company’s historic market share, route-to-market strategy, category presence, digital readiness, brand awareness and presence in growing channels and more.
The benefits of market research do not stop once the merger is approved. Market research should continue to be leveraged, ensuring you fully understand your new market landscape, refine your expansion strategy and build a strong global supply chain post-merger.
Ongoing historic and forecast industry data is essential in keeping abreast of any shifts in the market, particularly if you have partnered with a company that is in a new industry or category outside of your historic core competencies. Understanding your industry, the competitive landscape, channel distribution and consumer trends is even more important now and you need these insights to pressure test and adjust your strategic plan accordingly.
Upon partnering with a new company, it may make sense to re-prioritise the countries or categories in which they operate to better leverage existing capabilities. This could include creating a weighted scorecard utilising industry, macroeconomic and socioeconomic metrics as a way to rank the overall opportunity for existing and potential market investment.
Market research can assist in identifying upstream and downstream partners (i.e. raw material, ingredient, equipment suppliers or wholesaler, retailer, logistics providers) to better optimise supply chains for your new partnership.
Increasing shareholder value using M&A as a way to spur growth requires market research along every step of the partnership process, from uncovering potential opportunities to optimising your brand set post-M&A. Euromonitor offers both syndicated and custom market research solutions, partnering with clients around the world and across industries to help them make informed strategic business decisions. Contact us today to see how we can help.