Markets First

I always emphasize to my clients the critical value of painstaking market research and selection before considering individual prospects. Simply by conducting thorough research, you immediately separate yourself from the majority of company buyers and place yourself at an important competitive advantage.

Choosing Market Criteria

Choosing the correct market criteria may be tricky. Here are some guidelines for building effective market selection criteria, based on years of practice with clients in a variety of industries.

1. Focus on strategic aspects early. For example, if your one reason for acquiring is to bring a current competency to a new market, you want to make sure that whatever new market you buy into is growing sufficiently. In this case, growth rate should be one of your earliest criteria.

2. Be realistic about the availability of information. You may not be able to immediately get the sales figures for the previous year. Don’t worry, as you progress, you will gather increasing detail about the market. In the  beginning, you can make do with relatively broad information.

3. Limit yourself to no more than six criteria. If you have more than six criteria you can lose focus on the most meaningful strategic aspects. However, each individual criterion may have multiple metrics.

4. Make it measurable. When conducting your research, establishing target metrics for each criterion gives more power and focus to your decision-making process.

Establishing the appropriate criteria will help you guide your company’s strategic growth initiative.

5 pings

  1. […] you know I am a strong advocate for the “markets first” approach to searching for acquisition targets. The idea is that before you look for a company to […]

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  3. […] in a market they wanted to pursue. They didn’t hesitate. This is why I emphasize a demand-driven, markets first approach when pursuing […]

  4. […] presence more highly than those that do not. Use tools such as the Opportunity Matrix or Weighted Criteria or even a simple pro-con list to help you objectively sort through the possibilities and organize […]

  5. […] example, in Phase 1 of the Roadmap to Acquisitions, we establish and develop weighted criteria and throughout the process we use a pipeline management tool to track our progress. Throughout each […]

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