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In today’s competitive global market, organizations need to leverage every tool in their arsenal to stay ahead of the curve. One of the best ways to do this is strategic M&A. With the right approach, M&A can drive significant growth, unlock fresh opportunities, and expedite the achievement of strategic business goals. In this article, Yoav Zeif, CEO at Stratasys, shares his experience on achieving business growth through strategic M&A.
“Don't go for an M&A just because there is an opportunity. Go for an M&A only if it is part of your strategy and if it gets you closer to your North Star.” – Yoav Zeif
Competing in a broader market
When Yoav assumed his position as the CEO of Stratasys amidst the COVID-19 outbreak, it was the perfect time, and opportunity to reframe their strategy. He noticed that despite being an industry pioneer, Stratasys had faced a steady decline from 2014 to 2020 due to its limited focus on only two technologies. As a result, they were only addressing one-third of the overall opportunity in their market. This lack of technical diversity is a blind spot, preventing them from competing in growing markets.
This led Yoav to revamp the company’s strategy, shifting it towards embracing Polymer 3D printing. And the fastest way to get there is by acquiring new technologies to ensure competitiveness, especially in markets they don’t exist in.
Three-layered M&A strategy
Stratasys uses a framework that guides the company's efforts to fill strategic gaps or accelerate specific initiatives, rather than acting opportunistically.
- Core Technologies: This involves leveraging their existing internal capabilities and acquiring additional needed technologies to compete in the market.
- Add-On Technologies: This involves investing in add-on technologies, materials, and software to strengthen their core technology while reinforcing the company's position.
- Partnerships: Instead of acquiring or investing in all needed areas, Stratasys also seeks to establish partnerships that can assist in building the full workflow.
Through this structured approach, Stratasys aims to move from a prototyping industry to a manufacturing industry, focusing on polymers. The balance of these approaches allows the company to expand across different applications without misdirecting its focus or resources.
With a dynamic five-year plan, the strategy evolves based on market changes, lessons learned, and feedback from customers and partners, reflecting annual reassessments and adjustments to stay aligned with the changing market and the company's progress.
Big lessons learned
While consultants are great and can be invaluable for specific tasks, having in-house capabilities is still best. If there is a clear strategy and M&A activities are recurring, rather than a one-off event, then internal skills become essential. Having an internal team that can run strategies is a huge advantage because they understand the industry.
Also, people are everything. The biggest successes, surprises, and satisfaction will come from people, but also the largest disappointments and issues.