Increase your investment capacity

Business combinations can significantly boost investment in research and development (R&D).

Mergers with other companies can generate increased profits, providing the necessary resources to finance high-risk investments. This additional capital can pave the way for the introduction of new products or the expansion into new markets, which might be unattainable independently.

These collaborative efforts are particularly crucial for innovative industries and the healthcare sector, both of which demand considerable investment. It is worth noting that an estimated 90% of research conducted by companies never reaches the market. A partnership or merger that results in a larger company offers more capacity to absorb failure, thereby fostering innovation.

A previous Actoria study highlighted several key advantages of strategic alliances over traditional mergers and acquisitions (M&A):

1. Reduced upfront investment: Alliances present a less risky option for business combinations, as they don’t require the full financial commitment associated with acquisitions. Investments can be tested and executed in stages.
2. Enhanced flexibility: In comparison to M&A, most alliances offer greater adaptability and are easier to modify or dissolve. If management changes are required, they can be implemented more swiftly and with less difficulty.
3. Creation of a relationship ecosystem: Alliances enable organizations to simultaneously establish connections with multiple essential partners, a feat that is challenging to accomplish through mergers and acquisitions alone.
4. Access to vital partners that are unavailable for acquisition: In instances where potential partners are not for sale, alliances present the only viable alternative for collaboration.