Doom Weapons Case: Syntheizing Conclusions Answer
Question: What are the key points you'd raise to the Head of Business Development?
Answer: I'd start by making it clear that everything we're discussing is preliminary and could change as the project progresses. Then, I’d say:
- We feel that most of Future Industries’ value will come from its portfolio of products currently in development, its ability to develop and commercialize new plasma weapons on an ongoing basis and any patents or intellectual property the company owns. From what we understand so far, we don’t think that the company’s physical assets will be worth very much
- We’ve looked at one upcoming product in detail, the P1X plasma pistol, and it has strong numbers. According to Future Industries’ sales estimates, it will take the product only three years to make back its development costs, most of which have already been incurred. Of course, we need to validate the company’s sales estimates ourselves and look at its other upcoming products too
- So, in terms of the financial side of the deal, we haven’t found anything too off-putting so far. However, our major concern at the moment is the more ‘human element’ of the acquisition. Doom Weapons and Future Industries are very different companies and we have some doubts about their ability to work together effectively. For example, the time difference and language barriers alone will make this challenging. This is something that we will be looking into in more detail as we progress
- Our final assessment of whether this is an acquisition that makes sense for Doom Weapons will also depend on 3 other factors:
- The strategic goal of the acquisition. For example, if your aim is to buy expertise that can easily be transferred to your existing operations, this may not be a good fit
- The other strategic options you have for entering the plasma weapons segment. For example, whether there other companies that you could buy
- The price that you’ll have to pay to buy Future Industries, which could be impacted by a large numbers of factors. For example, whether other companies are interested in buying it
- Those are the points that come to mind so far. Do you have any questions or is there anything else you’d like to discuss?