The Three Choices: Buy, Sell, or Build
Operational excellence is the prerequsite of successful transformation. Yet, on their own, incremental improvements cannot take a business to the next level. Only a bold move can help you reach the next peak.
Buy
Buying a company, an asset, or a capability can rapidly transform an organization. The right acquisition can serve as a force multiplier for your current business, can help overcome barriers of entry, and help you quickly take advantage of fleeting market opportunities.
GET STARTEDSell
Selling is not just for fully exiting the business. The right divestiture can allow a business to exit specific markets, regain focus, redeploy scarce resources, introduce new strategic partners, return capital to shareholders, or harvest the value built since inception.
GET STARTEDBuild
Building a unique and successful capability, product, or business is can be a deeply rewarding endeavor for an entrepreneur. Yet building is the slowest and can be the most challenging activity a company can engage in. With the right partner, building can be the right choice.
GET STARTEDCharting the Path Forward
Crossroads Capital offers a unique process blending market research with advanced financial modeling to help companies select the best road for their corporate development journey.
Step 1: Know Your Environment
Effective strategy is never created in a vacuum. You can’t change the world around you, and so, Crossroads recommends that all decisions start with a fresh review of the operating environment including: market size and trends, competitive dynamics, regulatory priorities, political risks, technological disruption, and changing customer needs.
Step 2: Find Your Market Fit
The highest risk-adjusted value occurs when your company fully leverages its internal comparative advantages in the markets with the highest impact. To do so, Crossroads recommends that clients conduct an objective introspection of company capabilities, resource constraints, public perception, existing products or know-how, risk tolerance, and current shareholder goals.
Step 3: Generate Options
Once strategic choices have been made, these decisions reverberate throughout the organization and impact product R&D priorities, pricing, hiring practices, branding, market positioning, investments, and capital structure. Crossroads recommends that clients use a set of tools to generate as many ideas about how to attain the desired state, based on the strategy selected.
Step 4: Compare Options Quantitatively
Clarity of ideas is a prerequisite for formulating useful strategy. Financial models help decision-makers vividly picture exactly how an organization may look like in terms of profitability, capital structure, and investments required to properly follow the path desired. Crossroads recommends that organizations compare the viability of each option using metrics like IRR, NPV, or ROI using models to prioritize and “stress-test” options.
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