Build, Borrow, or Buy

CHAPTER 5

When to Buy

Acquisition Versus Alternatives

Up to this point in our book, we have consistently warned of the costs, risks, and entangling complexities of acquisitions. The buying strategy is appropriate only when other, more straightforward and transient strategies would fall short of achieving your goals. This chapter assumes that you now find yourself at the threshold of last resort: you need more encompassing access to strategic resources than in an arm’s-length contract and greater control over those resources than an alliance would allow. How should you proceed?

Begin by defining what you need an acquisition to accomplish. M&A can serve many purposes. Which combination of benefits do you require?

On the plus side, M&A is a potent ...