Ski Emporium And Deli Merger Analysis

Over 50% of all Mergers and Acquisitions end in failure which begs the question as to what common mistakes do business owners seeking expansion make? Does being successful in on market directly mean you will be successful in another? Unfortunately, this is not the case and many business owners have experienced the harsh reality of entering new markets. It is key for all business owners to gather all the facts and extensively plan before making this type of critical decision. While business owners should stay inspired to grow and expand, being too hasty could have devastating results. Fortunately, there are steps you could take to gauge better gauge the pros and cons of your decision. While you cannot completely control the future of a potential …show more content…
One glaring issue which stands out is that Dunn has very limited knowledge about how to run a Deli. For the last 25 years, Dunn has focused solely on ski equipment so venturing out to food may bring unforeseen problems that Atkins never had to manage. The transfer of knowledge from these contrasting businesses may not progress as Dunn envisions as we have seen history with companies such as JC Penny taking in the former CEO of Apple only to see stocks plummet from $42 to $14. To add onto that idea, the new environment brings upon new opportunities and risks that Dunn has little to no understanding. There is nothing revolutionary about a Deli business so knowing the intangibles that Atkins applies to his Deli business is important in the same way Dunn has achieved with his own ski equipment business. Another issue Dunn has to consider is the reason why the business is being sold in the first place. He knows Atkins is retiring soon, but is that the only reason? Does Atkins foresee laws, trends, or even his customer base negatively effecting sales in the near future? Dunn should remain skeptical of a seemingly prosperous business, even if the owner claims it is for retirement reasons. One final factor that has to be taken deep into consideration is the integration process of the businesses. What may look good on paper may not pan out once carried out in reality. Several causes for this may include poor communication between a new managerial staff, conflicting company values as well as conflicting visions between the businesses. Dunn needs to ensure he does his due diligence and goes through all of the minor details with a fine tooth comb. It is clear that Dunn is no in the position to operate the Deli business on his own, but this doesn’t have to be the deciding factor whether he should still acquire the