Management Consulting and Case Solving

for Dummies

12. Mergers and Acquisitions

Issac Jojy
PGP 2014-16

This will be a very short one and at the end of this document, Ill give an important pointer. In
Document 10 on New Market Entry Cases, on the question of HOW to enter a new market, two
options were getting into a joint venture with some other target company or acquiring a target
company. More generally, these options together are called Mergers and Acquisitions (M&As). The
reason I wont be spending too much time on M&As is that since you already am pretty familiar with
the case solving approach, there isnt much to explain. Ive attached a screenshot of the framework
that was given in one of the documents sent by ICON. Usually M&A cases arent asked so much. I
believe that the reason for this could possibly include
1. Unlike US or Europe, a lot of M&As do not happen in India. So the need to use M&A frameworks
is very less. Im not in anyway stating that M&As do not happen, but the frequency is less and
naturally, the number of M&A cases consulting companies get into are very less.
2. In most New Market Entry cases, the difficult question to answer is whether to enter a market or
not. If the decision is YES, the HOW to enter question has M&As as a possible option. In an
actual assignment, the bulk of the time is spent in analyzing whether to enter or not. Like for
example, in my summer intern, 90% of the teams time was spent in understanding the in and out
of the industry of the market our client wanted to enter and doing associated analysis on answering
the question on whether to enter or not. Acquiring a target company was just one of the many
options we came up with. So the point is that the primary focus is on the main question of whether
to enter or not. Although important, the how to enter question (which in itself is a separate case)
is more of execution of certain set of standardized tools. So, in case an M & A case is asked, you
just need to broadly follow the framework given below. The 5-step standardized process applies,
but itll be easier for you if you structure your questions around the below framework and making
your recommendations ONLY based on data.

A few general points - In terms of objectives for doing M&As, Ill give you a few options that you
can keep at the back of your mind just to know situations where M&A can occur. These options are
no MECE. There will be overlap and these are not completely exhaustive in terms of the possibilities,
but it gives you a broad idea about why M&As can happen. Dont mug it up. Just go through and
youll have a fair idea. Thats enough. (These are already given in the above framework Im just
explaining it a little more in detail)

Increasing the access for the client to the market through the target company It can be either
just to increase the brand strength for our client or to increase market share
The client might want to diversify the portfolio of products/services as part of reducing risks
in the industry that it might be operating and create multiple revenue sources
The client might have got some data that the competition is going to make some move that
will affect our client. So, the client might want to do an M&A with some target company to
counter such competitive moves.
The client might get some tax advantages if it does an M&A with some target company
Synergies can be created if M&As take place (Synergies can be in terms of cultures, resources,
competitive strengths etc. of the companies being part of the M&A

However, in the market, a lot of M&As turn out to be failures. Reasons are many, but I believe the
primary reason is the analysis done before deciding to go for an M&A would not have been robust
enough. If the analysis was robust enough, there is no reason why the M&As can be failures. The
execution of an M&A just flows naturally and logically from the analysis. If the foundation (analysis)
is weak, it is bound to fail. But there are a lot of M&As that succeed as well. Anyway, thats broadly
what you need to know about M&As
If you felt that unlike the earlier documents, this one was too broad and generic, it is precisely because
of the 2 reasons I mentioned earlier in this document. Moreover, while practicing M&A cases, youll
realize that using this above framework will be more than sufficient. Its just that at this stage when
youre reading this document, youre probably apprehensive that it is not as clear and in detail as the
earlier documents. Trust me For M&A cases, practicing a few cases with the above simple
framework will be more than sufficient.
Your MBA is done: Theoretically speaking, all fundamentals required for you as part of being an MBA
graduate have been covered by now. Theres nothing more to MBA. All the courses from Term 2 just
builds on this foundation.
Now, youre thinking : Is this why I spent all the time reading through 12 documents? I dont feel
very different. I dont feel transformed. This was not a great time investment
My response: The capsule administration is yet to be completed. Now starts the real transformation
Read on.

IMPORTANT NOTE:
With this, weve covered broadly the major types of cases. There are some additional types of cases,
some of which Ill discuss in the next document. The approach is always the same:
Client Context Setting Objective function Reverse Engineer ensuring MECE and ONLY based
on data at every level to isolate the problem Understand the systems in place to counter the problem
Provide recommendations based on need-gap analysis. In some of the case types we discussed, we
did modify this framework a bit based on the requirement. So, use this approach judiciously.
One additional point that I wanted to cover After going through all these documents and during the
course of your case prep - If you feel that a lot of the work that consultants do is theoretical paper
work, please note that it is definitely NOT the case.
For example, in an actual pure strategy formulation case project, the amount of interaction consultants
have with the top management of the clients is huge. The consultants collaboratively creates the
solution with the client for the client. The result the consultants will know the in and out of the
industry the client functions almost as much as the client itself, even though at the beginning of the
case, the consultants would not have had any clue whatsoever about the clients industry. The learning
curve for a consultant is huge, to the point that if the consultant feels that the business model of the
client can be improved, the consultant has immense knowledge of the industry that the consultant can
just start up his/her own company using the knowledge that he/she has gained. The reason why a lot
of investors invest in companies run by ex-consultants is precisely the same reason. They know that
these consultants would know the in and out of that industry, not just from a theoretical point of view,
but also the practical perspective. To show this, lets take an implementation case project. For example,
an operations case where the client does not have any systems in place in the clients manufacturing
facility and the consultants are hired to set the systems so that the operations are streamlined. The
consultants go to the factory, spend months there, work alongside the managers and supervisors of
the factors to understand the current client systems from the basics, use industry standards and
benchmarks to set systems for the client to streamline the operations to give the client long term
return. Now in this project, the consultants wouldve understood the basics from the grass root level
of how an industry functions. So, if you look at the full spectrum consultants have the opportunity
to be as close to the combination of Jack of all and Master of one which is Master of all. A lot
of it depends on luck as well in terms of which sector and which function you get allotted to. But that
is the case with every field whether it be consulting or marketing or operations etc.
I agree that there is a flip side of a work-life balance and spending time on ppts. End of the day, its a
trade off. Every coin has 2 sides. But even then, I was able to manage these 2 issues very well.
The reason why consultants use ppts is to communicate the analysis to the clients. PPTs are indeed a
good way to communicate all the information in an audience friendly way. Regarding the ppts, like I
already mentioned before, the firm in which I interned had a separate ppt making department. So I
did not have to spend too much time working on ppt formatting or creation. I could just draw my
slide requirement on a white A4 paper roughly, take a photo of that using a camera and send it to the
ppt department which would create the ppt within a matter of minutes/hours depending on the how
much content is there to be made on the ppt. And I feel all consulting firms will be moving in that
4

direction with time. So this issue will be sorted out in a matter of time. So dont worry too much about
this.
Regarding the work-life balance and how I found it very easy to manage consulting I have written
my approach extensively in Document 14 Some life gyaan and Overall summary where Ive
discussed my strategy to manage work-life balance not just from a management consultant perspective,
but overall in life Please do read it Once you read it, youll be convinced how I handled the worklife balance issue with regard to consulting Its about focusing on the right things in life and having
the right mindset. In this compilation of documents, Doc # 14 is the most important one without
a shade of doubt. So read it with complete focus and attention.
Anyway, personally for me, all the flip sides for management consulting have been countered.
Management Consulting for me provides immense diversity in terms of learning with an awesome
platform for maximum brain capacity utilization, in depth understanding at a theoretical and practical
level of various functions (operations, strategy, marketing, sales etc) across different industrial sectors
(FMCG, pharma, Insurance, Retail etc). Please dont get me wrong - Im not trying to sell consulting
as a field to you and am not trying to force you to get into consulting. Im just trying to be as objective
as possible in my reasoning. Whatever you feel is not right in whatever I said, you can ignore and do
your own research and find out for yourself.
For me, consulting is definitely not theoretical paper work where a top consulting firm just submits a
report to a client. Over the course of the first few documents as well as some inputs scattered here
and there throughout the course of all these documents, Ive given you my reasons. Use these reasons
that Ive given as a start, do your own set of analysis and research about consulting to decide whether
you actually want it.

The next document discusses certain unconventional case types. As of now, you DO NOT have to
read the next document. Its too early for you to read Document 13. Once you form a case group and
start doing cases, you can come back to Document 13 to get exposure to a few different types of cases.
You can skip Document 13 as of now and move on to the Most Important Document of this
compilation Document 14. If youre confused whether you should go to Document 13 or 14, you
have to go to Document 14. Even if you go to Document 13, I wouldve redirected you to Document
14. Ensure you focus completely on every word of Document 14 Some Life Gyaan and
Overall Summary