According to Revenuesandprofits.com, over the last 2 decades 60 pharmaceutical companies have merged their way in to 10 big pharma companies. Medtech is no different. And, despite the rash of mergers and acquisitions in previous years, the number of deals is not expected to slow down for the remainder of the year. In fact, research shows that the fundamental rationale for healthcare companies to merge is still true and there is still room to consolidate.
Fundamental Rationale for M&A in Healthcare
Companies still believe acquisitions are often a more efficient and cost effective mechanism for obtaining the next blockbuster product that will keep their revenues growing as fast as investors require to maintain or increase current revenues.
Additionally, when comparing the market share of leading companies in pharma and medtech to multiple vertical industries like mass merchant, software, the auto industry, and others, the leading pharmaceutical company has less than 6% market share. By contrast, companies like Toyota Microsoft, and Wal-Mart have 2, 3, and 11 times more market share, respectively.
Integrating sales and marketing functions is a crucial, but complex, activity in any merger or acquisition. Great care must be taken to retain customers and top sales talent, and to get the organization on the same page quickly to achieve the expected benefits of the M&A transaction.
Sales and marketing organizations falter in mergers and acquisitions for several reasons:
- Cultural differences between acquired or merged businesses
- Loss of high performers who get overlooked or frustrated
- Strategic accounts are neglected because of account manager churn
- Systems and processes are not harmonized, creating confusion and operational inefficiencies
- Product lines are not properly reconciled into high-value solutions for customers
Key Strategies for Accelerating M&A Success
- Implementing unified sales and marketing strategy
- Conducting Sales Force Effectiveness studies to identify relative strengths and weaknesses, and prioritize organizational improvement opportunities
- Auditing sales talent to identify integrated sales roles, required skills and competencies, managerial styles and preferences, and developmental needs
- Conducting “Voice of the Buyer” research to identify combined differentiators and new messaging for demand generation and prospecting
- Aligning sales and marketing processes
- Aligning sales and marketing teams with unified go-to-market messages and a customer engagement approach
- Creating buyer-focused processes for creating demand, winning deals, and growing market share
- Developing sales and marketing talent
- Equipping marketers and product managers to create content that addresses the issues most relevant to your customers that the unified organization can solve
- Training sales teams in a standard approach for planning and executing sales activities and managing opportunities and accounts
- Developing consistent skills for developing and presenting solutions
- Enabling sales managers and leaders to manage change and coach for organizational performance improvement
- Providing integrated technology and tools for sales enablement
- Providing a unified platform to manage the integrated organization’s sales talent and performance
- Enabling easier sales process execution through the use of CRM-integrated tools and apps, and streamlining necessary reports
M&A integration is an immense challenge. We help our clients make better decisions and get everyone on the same page faster, so that they can realize the full potential of the transaction.