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Jamie Carrahar

Chartered Management Accountant

Mergers & Acquisitions – Analysis for Scent

Not All M&As Are Alike—and That Matters — HBS Working Knowledge

http://hbswk.hbs.edu/item/2123.html

Joseph Bower (2001) identified five reasons why acquisitions occur, namely

  • to deal with overcapacity through consolidation in mature industries;
  • to roll-up competitors in geographically fragmented industries;
  • to extend into new products or markets;
  • as a substitute for R&D; and
  • to exploit eroding industry boundaries by inventing an industry.

In his article he also goes on to explain how to overcome the challenges presented from each M&A strategy.

Well worth a read as Scent may be looking to acquire another fragrance house or consolidate production, which will require you to apply financial accounting and reporting aspects to your answer along with details of the business strategy and project management angles too. Performance management may crop up in terms of investment appraisal, financial and non-financial performance measures and finally risk management.

(Thank you to Kevin for sharing this with me!)

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