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The topic of acquisition is very intriguing to me. My wife and I have decided to put our extensive restaurant background to good use and open a bar and grill. It is hoped that we will build a successful enterprise that will be purchased by a larger company.
As for answering the questions:
A) I do see this as realistic expectation. There is always the possibility that a smaller company will develop a product or service that adds instant value to a larger company. Furthermore, larger companies develop business models that include acquisition as a part of their growth strategy. I saw this strategy implemented time after time, when I was employed by SYSCO Foodservices. SYSCO, the largest food distributor in North America, carries multiple product lines in the foodservice industry. Their main focus is to be a one stop shop company for their customers. Accordingly, this meant entering markets where larger companies do not have the flexibility to be as successful as smaller companies do. For example, SYSCO attempted to enter the cut steaks market; however this is a market that requires certain operational and logistical expertise. For several years they were kept out of the market by smaller companies that had the expertise. To combat this SYSCO purchased a successful meat specialty distributor. As a result SYSCO gained credibility and market share in this industry.
B) I think my service offering would dictate this answer. If I developed a niche product I would definitely include acquisition in my plan. However, with my bar and grill business plan I would not include acquisition.
C) I would account for acquisition in my business plan under an important assumptions heading. Furthermore, I would list a potential dollar value and appropriate justifications for that value.
D) I do not consider this to be the same as anticipating winning the lottery. Hopefully, if this is being included in a business plan, there is reasonable evidence to suggest that an acquisition is possible.
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Sysco, Government procurement in the United States, US Foods, CFS Continental
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