Tag Archives: effective management

Building the acquisition team

drjohn11aDr. John Psarouthakis, Executive Editor, www.BusinessThinker.com. Founder and former CEO, JP Industries, Inc, a Fortune 500 industrial corporation. Adjunct professor, Strategy and Acquisitions, Ross School of Management, University of Michigan

This is the 5th of short articles of my thoughts about Acquisition of a business.

Building a good team is important right at the outset of your search. You will need an attorney almost immediately, to review any confidentiality agreements or letters of interest that must be signed. However, you should also begin to think about the other team members you will need early on in the search process. A good accountant is essential to the adequate review of the seller’s books, and possibly in addition, an independent auditor. Other consultants you need may depend upon your own skill levels and the nature of the business. If you will need outside funding, a financial consultant may be needed. Depending upon your own background in the functional business areas of sales and marketing, operations, engineering and manufacturing, you may or may not require outside help. An environmental consultant is increasingly needed whenever real property is involved in the transaction, to assure that no hidden problems exist.

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STRATEGIC MANAGEMENT: The Effective Manager

Research studies indicate that as much as 70% of a firm’s profitability is determined by industry / market factors, with the remaining 30% determined by the firm’s positioning.

Effective Manager:

The effective manager needs to understand and be able to use the latest strategy tools for analyzing industries, and be able to create strategies for sustainable advantage, and understand industry transformations.

Strategic management must include a broad set of strategic management issues, including:

  • Ø Industry analysis and the forces that determine industry attractiveness;
  • Ø Competitive positioning and the factors determining relative firm performance;
  • Ø Industry transformation and strategic sustainability;
  • Ø International strategy

Effective Managers must have the ability to develop, evaluate, and implement value-creating strategies for their business. They need to be exposed to the details that forces them to grapple with the real world tradeoffs, not just blackboard theories, and encourages them to work through strategic options.