Strong leadership played a pivotal role in the merger's success. Entrepreneurs must invest in competent and visionary leadership.
Customer-Centric Approach: NCBA maintained its commitment to providing exceptional customer service during the merger, reinforcing the importance of putting customers first.
Mergers can be highly beneficial for entrepreneurs and businesses for several reasons, often presenting opportunities for growth, diversification, and increased competitiveness.
Given how the business environment has been difficult, with over 3200 SMEs shutting down daily since March 2020, mergers seem the best alternative, to survive a winter moment and thrive during Spring.
Mergers can provide businesses with access to new markets and a broader customer base. This can be especially valuable for entrepreneurs looking to expand their reach. For example, when Facebook acquired Instagram in 2012, it gained access to a younger demographic and a popular photo-sharing platform, allowing it to diversify its user base and increase engagement. Entrepreneurs can leverage mergers to tap into previously untapped markets and demographics, which can drive revenue growth.
Not to mention that mergers can create synergy by combining complementary resources, capabilities, and expertise. Entrepreneurs can benefit from cost savings through economies of scale, shared resources, and reduced overhead costs. An illustrative example is the merger of Disney and Pixar. By merging, they combined Disney’s distribution and marketing prowess with Pixar’s cutting-edge animation technology, resulting in a highly successful partnership that produced hit films like “Toy Story” and “Finding Nemo.” Entrepreneurs can similarly find synergistic opportunities to enhance their competitive advantage and profitability.
One critical aspect of mergers is to allow entrepreneurs to diversify and leverage their business portfolios, reducing dependence on a single product or market. This diversification can mitigate risks associated with economic downturns or industry-specific challenges. For instance, when Amazon acquired Whole Foods, it diversified its revenue streams beyond e-commerce into the grocery industry, reducing its vulnerability to online retail competition. Entrepreneurs can use mergers strategically to spread risk and create more stable, resilient businesses.
The development of technology in such a fast manner has seen mergers being able to foster innovation by bringing together talented individuals from different backgrounds and skill sets. Entrepreneurs can use mergers to acquire top talent, intellectual property, and innovative technologies.
An excellent example is Microsoft’s acquisition of LinkedIn, which provided Microsoft with access to LinkedIn’s vast professional network and data, enhancing its enterprise software and cloud services. Entrepreneurs can leverage mergers to bolster their innovation capabilities and stay ahead in rapidly evolving industries.
The birth of NCBA through the merger of NIC and CBA banks stands as a monumental event in Kenya’s banking history. This merger not only reshaped the financial landscape but also offered a treasure trove of valuable lessons for entrepreneurs aspiring to scale their businesses, manage risk effectively, and harness greater resources for growth. COVID-19 killed almost 60% of SMEs in 2020, as we emerge from the dark season of COVID-19, I reflect and look back and wonder, what could we have done differently.
What could have been avoided to help businesses survive the winter of COVID-19 and the birth of NCBA offers interesting answers on what can be done to survive the winter of money and thrive in the spring of customers.
The birth of NCBA offers us entrepreneurs, CRITICAL KEY lessons that we can learn from, in what is widely regarded as the best merger deal in the country’s history. These lessons are;
By carefully considering the strategic advantages of mergers, entrepreneurs can harness these opportunities to access new markets, achieve cost efficiencies, reduce risk, and drive innovation. While mergers also come with challenges and risks, a positive outlook, coupled with thorough due diligence and strategic planning, can position entrepreneurs for long-term success and sustainable growth.
With these lessons, entrepreneurs can draw inspiration from one of the most successful mergers in Kenya’s history and chart a course toward their remarkable achievements in the world of business.