MERGERS, PARTNERS, and SUPPLIERS

Financial and economic things HAPPEN when one corporation merges its strengths (and weaknesses) with others.

When a complete acquisition occurs the event is called a "merger." When an agreement to collaborate in mutual success occurs the event is termed "partner." When and agreement is entered to exchange goods and services among the parties, it is called "supplier" or "provider" interaction. Note that these are all of the same "class" of business relationships. The difference is in the extent (magnitude) of the interaction and the ownership of the responsibility to perform the value delivery.

When enterprises that look like these merge together - NOT MUCH HAPPENS!

All companies have much of the same competencies, strengths and weaknesses. What will occur is considerable internal conflict about which is the "best" way to merge the TWO front offices into one.

Similarly, when these enterprises merge with one another - NOT MUCH HAPPENS!

Both are strong in back office processes and weak in front office. There is little chance of finding a boost in front office strength because all have ignored investing in these processes. It is not their culture to do so.

Note in passing that if these companies "benchmark" with one another that little will happen either. The expense will be greater than the benefit.

It matters "WHO" interacts with "WHOM."

HOWEVER, when one of the enterprises from the first set "merges" with one from the other - STUFF HAPPENS!

The strengths of one fill in the weaknesses of the other. Watch out, power can occur.

Shown above are mergers "within" the same industry. Full mergers are candidate events for anti-trust evaluation because the intention is to create more POWER. They are also a candidate for investment analysis in the equity market. One can see why the ITOP methodology has enjoyed a widespread use in the brokerage industry. It is the ONLY serious methodology that provides these views of what is going to happen.

A fun "White Paper" on Supply Chain Value Management/Optimization is available in Adobe format by clicking the following link.

Supply Chain Dilemmas Solved (225k pdf)

It may not be as clear that the cross-industry supply chain and partnering can be analyzed in the same fashion. It can. ALL corporations have a need to buy what they choose not to build. Each must fill in the missing gaps!!!!

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