NIG MODE can also be used to evaluate specific opportunities like M&A opportunities. Strategic fit would in this case  refer to how well the potential acquisition fits with the planned direction (strategy) of the acquiring company. In order to justify growth through M&A transactions the  transaction  should yield a better return than Organic growth. The Differential Efficiency Theory states that the acquiring firm will be able  increase its efficiency in the areas where the acquired firm is superior. In addition  the theory argues that M&A transactions give the acquiring firm the possibility of achieving positive synergy effects meaning that the two merged companies are worth more together than the sums of their parts individually.Ivey Management Services (1995) “A note on mergers and acquisitions and valuation”, Ivey This is because merging companies may enjoy from economics of scale and economics of scope. However, in reality  many M&A transactions fails due to different factors, one of them being lack of strategic fit. A CEO survey conducted by Bain & Company showed that 94\% of the interviewed CEO’s considered the strategic fit to be vitally influential in the success or failure of an URL A high degree of strategic fit from can potentially yield many benefits for an organization. Best case scenario a high degree of strategic fit may be the key to a successful merger, an efficient organization, synergy effects or cost reductions. It is a vital term and it should be taken into consideration when evaluating a company’s strategy and opportunities.
 can also be used to evaluate specific opportunities like M&A opportunities. The strategic fit would, in this case , refer to how well the potential acquisition fits with the planned direction (strategy) of the acquiring company. In order to justify growth through M&A transactions the Financial transaction| transaction , should yield a better return than Organic growth. The Differential Efficiency Theory states that the acquiring firm will be able to increase its efficiency in the areas where the acquired firm is superior. In addition , the theory argues that M&A transactions give the acquiring firm the possibility of achieving positive synergy effects meaning that the two merged companies are worth more together than the sums of their parts individually.Ivey Management Services (1995) “A note on mergers and acquisitions and valuation”, Ivey This is because merging companies may enjoy from economies of scale and economies of scope. However, in reality , many M&A transactions fail due to different factors, one of them being lack of strategic fit. A CEO survey conducted by Bain & Company showed that 94\% of the interviewed CEO’s considered the strategic fit to be vitally influential in the success or failure of an URL A high degree of strategic fit from can potentially yield many benefits for an organization. Best case scenario a high degree of strategic fit may be the key to a successful merger, an efficient organization, synergy effects or cost reductions. It is a vital term and it should be taken into consideration when evaluating a company’s strategy and opportunities.
D
NIG MODE
R
Strategic fit would
The strategic fit would,
A
,
A
Financial transaction|
A
,
A
to
A
,
R
economics
economies
R
economics
economies
A
,
R
fails
fail