What To Know
- Their acquisition of Misfit, a leading fitness tracker manufacturer, provided them with instant access to a team of skilled engineers and designers, enabling them to quickly launch competitive products in a rapidly evolving space.
- By strategically acquiring the talent behind a successful platform, they gained the necessary expertise and agility to compete in a dynamic and competitive landscape.
Leading companies across diverse sectors are leveraging a powerful tool: techquisitions. This strategic approach involves acquiring smaller, digitally-native firms to accelerate their digital transformation and gain vital capabilities.
What’s The True Digital Transformation?
A strategic shift is afoot in the corporate landscape. Traditional, non-digital businesses are recognizing the imperative of digital transformation, and techquisitions are emerging as a potent weapon in their arsenal.
Let’s delve into the specific ways Under Armour, Fossil Group, Monsanto, and Generali Group have utilized techquisitions to propel their digital business initiatives.
Under Armour: Accelerating Digital Sales and Marketing Through Techquisitions
- Objective: CEO Kevin Plank saw a clear path to success: capitalize on the growing trend of fitness tracking and social sharing to drive both product sales and digital marketing.
- Acquisition: By acquiring fitness (MapMyFitness) and nutritional platforms (Endomondo), Under Armour gained instant access to a massive user base and their valuable data.
- Outcome:
- This enabled the company to not only personalize marketing campaigns but also inform future “smart” product designs.
Beyond mere platform acquisition, Under Armour embraced the social media capabilities of its targets.
This strategic move allowed them to leverage existing communities for brand promotion and customer engagement, propelling their digital sales and marketing to new heights.
Fossil Group: Acquiring Talent to Enter a High-Growth Market
- Objective: Recognizing the scarcity of top digital talent, Fossil Group employed a targeted acqui-hiring strategy to enter the booming wearables market.
- Acquisition: Their acquisition of Misfit, a leading fitness tracker manufacturer, provided them with instant access to a team of skilled engineers and designers, enabling them to quickly launch competitive products in a rapidly evolving space.
- Outcome:
- This acqui-hiring approach circumvented the lengthy process of internal talent development, propelling Fossil Group to the forefront of the wearables market.
By strategically acquiring the talent behind a successful platform, they gained the necessary expertise and agility to compete in a dynamic and competitive landscape.
Monsanto: Expanding Value Chain and Serving Future Farmers
- Objective: For Monsanto, the goal was not just to acquire platforms, but to amplify the value proposition of its existing offerings.
- Acquisition: The acquisition of The Climate Corporation, a weather data and analytics firm, allowed Monsanto to provide its customers with software-based decision-making tools for planting and harvesting.
- Outcome:
- This not only enhanced the value of their current products but also positioned them to meet the evolving needs of future farmers.
- By integrating data-driven insights into its traditional agricultural offerings, Monsanto extended its value chain and positioned itself as a leader in precision agriculture.
This strategic techquisition exemplifies how companies can leverage digital capabilities to enhance customer relationships and create new avenues for growth.
Generali Group: Monetizing Customer Insights for Risk-Based Pricing
- Objective: In the realm of insurance, customer data is king. Recognizing this, Generali Group acquired MyDrive Solutions, a sensor and data analytics company.
- Acquisition: This strategic move equipped them with the tools to collect real-time driving data on speed, location, and driving habits.
- Outcome:
- Armed with this data, Generali Group implemented a revolutionary risk-based pricing model for car insurance.
- Safe drivers were rewarded with lower premiums, while those exhibiting risky behavior faced adjusted rates.
This innovative approach not only improved customer satisfaction but also allowed Generali to optimize their risk management strategies.
The Importance of Strategic Focus: Techquisitions
- While motivations for techquisitions vary, the core principle remains the same: acquiring unique digital capabilities to drive growth and stay ahead of the curve.
- Unlike traditional mergers focused on cost and asset optimization, techquisitions demand a different approach.
- Preserving the acquired company’s differentiating assets and fostering its value-driving innovation are crucial for success.
A New Era of Digital Transformation
These diverse examples illustrate the multifaceted nature of techquisitions. From accelerating sales and marketing to acquiring talent and monetizing customer insights, digital acquisitions offer a powerful path for traditional businesses to navigate the digital age.
As the landscape continues to evolve, one thing remains certain: the ability to harness the power of techquisitions will be a defining factor in the success of tomorrow’s leading corporations.
Techquisitions represent a decisive shift in traditional acquisition strategies, moving beyond mere cost optimization to focus on acquiring and integrating unique digital capabilities.
As Mr. Schulte aptly concludes, “Techquisitions are not simply mergers and acquisitions. They are deliberate endeavors to acquire and preserve differentiating assets of digital-born companies, enabling established players to unlock transformative innovation and achieve sustainable digital growth.”
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