Add-On, Bolt-On, or Bolt-Off? How Positioning Can Make or Break Strategic M&A
Misaligned narratives weaken acquisition value.
In the realm of mergers and acquisitions (M&A), strategic intent is often well-defined. Growth through acquisition, market expansion, capability enhancement etc, are familiar objectives for any executive team. However, while strategy outlines what a company intends to achieve, it is positioning that determines whether those ambitions translate into sustainable value.
A cautionary tale illustrates this distinction. On a recent project we reflected on a series of acquisitions, to resembling being “a kid in a sweet shop.” The company acquired an AI startup (“it looked innovative”), a logistics platform (“it might be useful”), and a VR gaming company (“it was cheap”). On paper, the strategy was coherent: increase enterprise value through acquisition. However, within six months, the business struggled to integrate its new assets. The AI team was developing tools with no clear application, the logistics platform remained siloed, and the VR team had been reassigned to customer support all whilst the core business continued trading totally separately.
One could claim the company lacked strategy. In truth, the strategy was present, but the positioning was absent. There was no unifying narrative to explain how these acquisitions fit together, no articulation of how they advanced the company’s mission, and no clarity for employees, customers, or investors. The result was a fragmented organisation, a confused market, and a diminished return on investment.
Strategy vs. Positioning: A Strategic Distinction
Strategy is the plan of action what the company will do to achieve its goals. In M&A, this might include acquiring complementary capabilities, entering new markets, or consolidating industry positions.
Positioning, by contrast, is the narrative framework that gives strategy meaning. It defines how the company is perceived in the market, how its offerings are understood, and how its internal teams align around a shared purpose. Positioning is not a communications exercise it is a strategic imperative.
Without positioning, even the most well-conceived strategy can falter. Acquisitions may be individually attractive, but without a coherent story, they become disconnected bolt-ons. Employees struggle to see how their work contributes to the whole. Customers are unclear about the company’s value proposition. Investors question the rationale behind the deals.
The Risks of Poor Positioning in M&A
The absence of clear and consistent positioning introduces a range of risks that can undermine the success of an M&A transaction. These risks are not hypothetical they are well-documented and frequently observed in failed or underperforming deals.
1. Undervaluation and Deal Collapse
When the strategic value of a target company is not clearly articulated, it is often misunderstood or undervalued by the acquirer. This can lead to protracted negotiations, reduced deal terms, or even the collapse of the transaction. Moreover, weak positioning can result in ineffective messaging to key stakeholders, investors, partners, and employees, eroding confidence and jeopardising the deal.
2. Integration Challenges
Integration is one of the most complex aspects of any acquisition. Without a shared narrative, integration becomes a mechanical process rather than a strategic one. Cultural misalignment, operational inconsistencies, and conflicting management philosophies can create friction and inefficiency. The absence of positioning makes it difficult to prioritise integration efforts or to communicate a compelling vision for the combined entity.
3. Reputational Damage
In today’s transparent and hyper-connected environment, poor communication and a lack of clarity can quickly lead to reputational harm. Customers may question the company’s direction, employees may feel alienated, and partners may lose trust. Reputational damage not only affects brand equity but can also have material financial consequences.
4. Failure to Capture Synergies
Synergies are often the cornerstone of M&A value creation. However, without a clear understanding of how the acquired company fits into the broader strategic narrative, these synergies are frequently overestimated or unrealized. Integration difficulties, misaligned incentives, and unclear priorities can all prevent the realization of anticipated benefits.
5. Operational and Strategic Risks
Hidden Liabilities: Inadequate due diligence, often stemming from a lack of strategic clarity, can result in the discovery of legal, financial, or operational liabilities post-acquisition.
Regulatory Hurdles: A fragmented or ambiguous business model can complicate regulatory approvals and increase compliance risk.
Employee Turnover: Uncertainty about the company’s future direction can lead to the departure of key talent, undermining both the acquisition and the core business.
The Strategic Value of Clear Positioning
While poor positioning can derail even the most well-intentioned strategy, the inverse is equally true: clear, consistent positioning can significantly enhance the success of an M&A strategy.
A well-defined narrative provides a strategic lens through which to evaluate potential acquisitions. It ensures that each deal contributes to a coherent whole, rather than becoming an isolated initiative. It also facilitates smoother integration by aligning teams around a shared purpose and providing clarity on roles, priorities, and outcomes.
Importantly, positioning does not constrain innovation, it enables it. With a clear sense of identity and direction, companies are better equipped to explore adjacent opportunities, enter new markets, and inspire creative thinking. Positioning provides the connective tissue that transforms a collection of assets into a unified, high-performing enterprise.
Conclusion: Positioning as a Strategic Imperative
For CEOs, founders, and funders, the message is clear: strategy alone is not enough. In M&A, success depends not only on what you acquire, but on how you make it make sense. Positioning is the bridge between intent and impact. It aligns internal stakeholders, clarifies value for customers, and builds confidence among investors.
In the end, the most successful M&A strategies are not those with the most deals, but those with the most coherence. And coherence begins with a clear, compelling, and consistent narrative.