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Discover diamonds among coal. Thus reads the first of the five strategic principles discussed in High Performance Companies: Successful strategies from the world's top achievers by Nitin Pangarkar (www.josseybass.com).
As example of discovering diamonds among coal, consistently, the author mentions Mittal Steel which has built a global empire through acquisitions. Pointing out that the company's acquisitions have not been greeted with a negative stock market reaction as so often happens in acquisitions, Pangarkar reasons that it is because Mr L. N. Mittal (LNM) rarely overpays for targets, which is the predominant cause of negative market reaction. He distils the group's formula for identifying attractive targets as follows: choosing DRI (direct reduced iron) technology; finding good deals; extending global presence; bucking conventional wisdom; and taking on Herculean challenges. Talking about the ‘challenges,' the author cites the case of acquisitions in the former Eastern Bloc, where financial statements proved unreliable because plants often did business via barter involving rather curious merchandise.
Diverse business anecdotes presented in a strategy context.
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