Description

As the CEO, you have decided to embark on a diversification strategy and have located a potential candidate to acquire and need to execute a complete due diligence on a potential acquisition. The purchase is an unrelated product and market as compared to your current business model.

You current product mix provides manufactured products to the automotive industry. In stark contrast the potential acquisition’s main focus is supplying monitoring devices for cardiac care units. The monitoring device company often donates to hospitals these devices to needy patients who cannot afford them and are a significant impact on the bottom line.

Discuss the key issues of the potential acquisition in terms of the risks and rewards of going forward. How will you determine if this is simply an overzealous CEO chasing a better “bottom line” or is it a viable option for improving the performance of the auto products company?

Lastly, how would you evaluate the impact of corporate social responsibility on the decision? If you acquired the cardiac device company would you continue its device donation program to the needy patients?

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