External growth to develop your company

The innovation process often starts with the identification of a market problem and a solution designed to solve it; in this logic, the more the pain point is "hot", the more the solution will be valuable. Also, in order to transform this approach into a profitable business opportunity, as we have already developed in the article "Innovation as a business opportunity", the company can consider an internal development (or organic development) and, if it is not able to lead this process alone, it can subcontract all or part of it, or even create strategic partnerships to achieve this. But this is not the only way... Thinking externally, considering the acquisition of a company already positioned in terms of market, offers, assets or skills, is a complementary way to study and not to neglect. In this case, innovating through external growth is a development gas pedal for the company.

BENEFITS OF AN EXTERNAL GROWTH OPERATION

External growth can be perceived as a complex, sometimes long and sometimes uncertain process, especially when it is the first time. However, for small and medium-sized companies, which are not yet massively in favour of this strategic option, making the choice to acquire in order to grow is an effective way of accelerating their growth strategy.
Contrary to popular belief, this type of approach is not only reserved for large companies, which regularly take this route to development. It represents a complementary means of organic growth, an alternative way of identifying and acquiring new skills and know-how, of facilitating access to new markets, of integrating the mastery of a technology, or of acquiring a new industrial tool... In short, it can become a formidable source of innovation for the company that takes it up. It can save time, secure the innovation process and allow the company to catch up, to redeploy or to anticipate new trends, once the possible growth opportunities have been identified.

Ideally, this acquisition process extends an in-depth exploration phase that will have enabled the company to identify and select possible areas of innovation in line with its strategy.

A SOURCE OF GROWTH FOR THE COMPANY'S DEVELOPMENT

In this way, the company can find in a target the components it needs to successfully complete its final project: more rapidly mastering specific operational constraints, rapidly proposing a differentiating approach to its market, attracting the distinctive in-house skills that are indispensable for achieve or relying on a business model that has already been tried and tested. One or more of these factors, inherent to the innovation process, may already exist in the company's ecosystem at the time it plans to innovate. And for reasons of market access and cost, the ecosystem may turn out to be a highly relevant pool of assets to take into account.

Innovating and growing by bringing companies together is a human adventure and relies on building positive synergies between the two companies involved. It is a matter of finding a strategic complement while anticipating future integration in order to give meaning to the new entity. Because when the marriage is effective, at the moment when the organizations concretely begin to pool their identity, their resources, their singularities, their values, the best and the hardest part begins...
To succeed in this challenge, it is therefore essential to prepare the process in advance. And in this field as in others, the success of the approach is rarely the fruit of a single fortunate opportunity; it can even less be restricted to an exclusively financial approach. It is necessary to go beyond that.

External growth to develop one's company is above all an industrial and human project, a common development project. Because, in this type of approach, let's not forget that at the beginning the targeted companies were not necessarily for sale, and they will only think seriously about this option if the proposed approach leads them to think of a new horizon, more solid and more promising.
Confronting one's project at the right time with the hidden market is all the more effective as the entrepreneurial cycles of our economy are getting shorter, making more and more managers attentive to external solicitations.

Meeting your market is the essence of any business approach. "Innovating through external growth", when it comes to not reinventing what already exists, follows the same rule. Seeing this hidden market as a reservoir of potential innovations and exploring it through external growth is an authentic way to innovate and develop its sources of value creation.
To achieve this, the approach must be structured as we describe in our article "How to innovate through external growth?".

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