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Strategic Acquisitions - Telecommunications Case Study
Everything is connected to everything. Everything is moving from large, to small, to micro, to nano. That means computing power in the palm of our hands and soon in our blood cells.
In order to turn data into information and knowledge, we need telecommunications. As an example, one of the largest growing fields is the convergence of 2-D data and entertainment. The convergence requires much larger and more efficient communication pipelines. Not everyone needs the same pipeline of services. Therefore, the Telecommunications industry must respond with customized communication services for any rich-media object. That means, for anyone in the world, at anytime, all the time, in any direction.
Let's take a look at a US Based, Telecommunications company with 9,000 employees, operating in 34 states plus one international operation.
They sought DeSai's help to develop new service offerings. Organic growth was their focus although they were open to acquisitions that would bring capabilities the company sought for wireless communications. The company asked DeSai to validate the targets before it spent hundreds of millions of dollars on the acquisitions.
The DeSai team dug deep into what jobs customers were really trying to get done in the target market by conducting interviews, implementing surveys and performing observational research.
The work resulted in the conclusion that customers were seeking to accomplish a set of jobs involving much different performance dimensions than what the client had originally envisioned.
DeSai recommended acquiring the capabilities to address the jobs from one of several struggling (and inexpensive) firms, rather than the high-priced acquisition target the firm was considering. Why? Because of the different capabilities identified during the vetting process.
Results Are The Measure of Innovation Success
How did applying the DeSai Body of Knowledge impact the company?
- DeSai's recommendation saved the telecom client millions of dollars in acquisition costs while showing the company an inexpensive route to acquire the capabilities it really needed to address the right customer jobs-to-be-done.
- Client achieved 22% top-line growth in first three years.
- 15% net contribution to the bottom line during the first three years resulting from the innovation program/process.
Change your innovation culture to allow validation of key assumptions before committing large amounts of resources to a project.
Your Turn. Please comment below.
- What is your system of checks and balances for vetting possible acquisitions?
- How is convergence impacting your business opportunities?
- Do you prefer organic growth or acquisitions to increase the size of your business?
You can download FREE articles at www.desai.com/resources.