Decisions about merging and with whom should be subordinate to your company’s growth strategy; focus first on a clear definition and understanding on the vision, mission and objectives of your company and then explore different scenarios for achieving those (a merger may be one of those scenarios). If your acquisition consultant is telling you otherwise, find a new one.

Consider a merger in the broader context of strategy and strategic fit. At a high level, this effort will shape and guide what the organization is, what it does, and why it does it. Strategic planning provides an explicit and shared understanding of the organization’s purpose, business and values among staff, board, and external stakeholders. It establishes a blueprint for action that guides and supports the management and governance of the organization.

Merger-resized-600In the process of doing this, you will explore strategic alternatives and the realization of theMerger, growth strategy future implications of present decisions. Grounded in the values, vision, and mission of the organization, strategic planning includes a realistic assessment of the organization and the environment in which it operates. The organizational assessment will look at your company’s strengths, weaknesses, capabilities and internal factors that can affect the organization. The environmental assessment will evaluate the threats and opportunities that your company faces; these will include regulatory, political, government issues and other external market forces.

The outcome of the strategic planning process will identify the vision for your company and the strategy to achieve that vision, which may likely include a number of strategic goals.

Some of the more common strategic goals that typically arise from a strategic planning session are:

  • Expand into new geographies; expand into new markets
  • Extend and/or add new products/services
  • Significant growth, revenue and profitability objectives
  • Develop sufficient financial resources to support immediate and significant growth
  • Build an efficient service delivery system
  • Establish/enhance infrastructure, business processes, and operational effectiveness
  • Increase political accessibility and power
  • Establish strategic alliances; for better access to clients, to better serve clients (e.g. complete service offering). Sometimes, these strategic alliances are a “trial marriage” that will result in a combination of the businesses.

Driving Forces to Merge

In evaluating how a merger fits into this, determine how such a merger will help you achieve your company’s vision and strategic goals; that is, what’s the strategic fit?

To determine strategic fit, it is useful to look at the forces that are driving for a merger. The driving forces most often identified by merger partners as having been the most important factors influencing them to consider such an alliance are: programmatic, managerial, financial and environmental.


  • Diversify or expand “product/service” mix
  • Gain geographical market share
  • Improve the quality of products and services
  • Associate with a high quality organization


  • Strengthen the administrative structure and/or leadership
  • Utilize human resources more effectively; access to broader pool of human capital
  • Provide better opportunities for specialization
  • Obtain state-of-the art technological capacities
  • Establish the organization’s strategic position


  • Gain access to increased or more reliable funding
  • Gain access to capital funds
  • Improve the organization’s profit margin
  • Reduce costs through economies of scale


  • Increased competition
  • Competition for resources – from raw materials to supply chain access
  • Threat (real or perceived) of being acquired, merged or consolidated
  • Political: laws and regulations

Although by no means is this a comprehensive list, you may recognize some of these driving forces as your own.

Whatever the reasons you may have about the attractiveness of a merger, remember, it all starts with strategy; decisions about merging and with whom should be subordinate to the strategy and made in the context of your company’s vision, mission and objectives. If you can’t provide a clear (and even concise) answer to the question “how will this merger help me achieve my company’s vision and strategic goals?” then the merger may not be as attractive as you initially may have thought.