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Exit strategy is key for corporations, especially in the current economic climate. In 2023, merger and acquisition (M&A) activity has slowed attributable to rising rates of interest and uncertainty around geopolitical events. So in 2024, Morgan Stanley Research is forecasting a 50% increase in transaction volume in comparison with last yr. Why the change? Morgan Stanley cited rising business confidence and positive global economic news.
Signs point to an increase in M&A activity. In the first half of 2024, the total number of worldwide M&A deals is valued at $425 billion. And M&A volume increased 130% yr over yr in Q1 2024. While the decision on whether to pursue an acquisition or growth strategy depends on a company’s goals, priorities and unique circumstances, an acquisition is an attractive prospect for several reasons. Among them:
- Faster return on investment
- Freedom from the uncertainty and risk of attempting to scale your online business on your individual
- Accelerated growth beyond what was possible as a standalone entity
- Greater market traction through access to a larger customer base, distribution channels and market presence
Getting thus far requires the right approach. By focusing on profitability, gaining market share and brand awareness, developing the right strategic partnerships, and creating maximum value for your customers in terms of name and customer loyalty, you may position your organization in a very attractive position for a potential acquisition.
Before taking this step, it’s essential to grasp the nuances of language. Acquisition messaging is very different from sales or media relations. Acquisition messaging must focus on the market opportunity, mental property, differentiators, company vision, leadership team, and proven market share.
First steps
There are many different types of performance metrics that permit you to assess the success and stability of your online business, including: market shareprofitability, integration of strategic technology partners, customer satisfaction, brand loyalty and share of voice.
Market share metrics can come from leading industry analysts. Analyst relationships are an essential aspect of an integrated marketing plan. Analysts provide quantitative and qualitative third-party validation; their metrics might help display your driving forces and differentiators. You should consistently weave them into your messaging.
Like market share, share of voice is comparable. It measures the visibility of your media reach in a competitive landscape and is essential to display that your organization is leading and shaping industry conversations. Additionally, surveys can assist you to measure customer satisfaction and brand loyalty.
Joint marketing programs with strategic partners not only help increase visibility, but may also be a conduit for successful M&A deals. If you may show how your offering fills a gap in their portfolio and helps them compete and bring in some deals, you’re effectively putting your organization on their acquisition radar.
Refine your messaging, then collaborate with experts. Start with clear messaging and consistent communication across all marketing channels, including your website, media relations, press releases, analyst relations, thought leadership, and social media communications.
Then you may start weaving in your experts. Growing champions with industry experts through a dedicated industry analyst relationship program can positively impact market perception and help set the stage for a successful exit.
As mentioned earlier, analysts and other external influencers are torchbearers who can validate your market share, promote your technological differentiators, and display how your product or service advantages customers with credibility that goes beyond just talking about it. This includes third-party credibility in the type of positive positioning in relevant market research reports and ongoing, direct conversations they have with their customers every day about which vendors to think about.
Your executive team of corporate spokespeople plays a large role in communicating your message to the market through paid, acquired, and owned media. This includes communicating your vision, your differentiators, your go-to-market strategy, your direction for strategic partnerships, and what sets you apart from other players in your industry.
Transparency is key from the start. Don’t underestimate the due diligence process. Make sure you’re addressing common pitfalls. Warning signs that warrant direct communication can include company funds, overall performance, customer and partner relationships, worker retention, and legal issues.
Start preparing now
An exit strategy must be a part of your online business plan from the very starting. With the end goal in mind, you may create a roadmap for find out how to get there. This helps crystallize your vision of where you need to go and focus on your goals for your online business. You define success by providing an end goal that your team can work toward with time frames and milestones.
Keep trends in mind. Identifying and analyzing the big trends that are driving change and shaping an industry is essential for any company to remain ahead in an ever-changing market landscape. These trends can include economic aspects (akin to inflation, rates of interest, and GDP growth), regulatory aspects, or environmental aspects.
With a solid understanding of the industry issues that impact customer acceptance and enterprise or private equity financing, you may make informed decisions about where to focus your online business strategy, product/service development, sales, and marketing efforts.
One recent example of this trend has been the rise in cybersecurity M&A and financing driven by the shift to distant work. Cybersecurity is a cornerstone of business continuity and resilience in today’s digitally connected world. The cybersecurity landscape is experiencing a significant increase in M&A activity.
Fifteen Cybersecurity-Related M&A Dealsincluding several large deals, announced in the first half of May 2024. Through mergers and acquisitions, these corporations are consolidating to expand their security portfolio and provide more comprehensive solutions. This strengthens their market presence, helps them compete, and attracts a broader customer base.
Leading the strategy to the exit
Leadership plays a key role in shaping a company that is ready for acquisition. Leaders, especially those in the technology industry, need to start out implementing strategies and tactics that may make their organizations attractive to potential M&A opportunities. Focus on value creation and stay current with industry trends; this includes evaluating valuations of other corporations in your industry. And don’t forget that effective marketing communications is the cornerstone of M&Successful. Work with internal and external experts to make sure your unique value proposition is clear and widely known.