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DUE DILIGENCE |
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There are three main categories of due diligence: real estate due diligence,
financial due diligence, and business due diligence. Our focus is on business
due diligence which is essential for M&A and business restructuring.
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● WORK FLOW |
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Our business due diligence does not begin until we acquire an accurate
grasp of our client's business model. Upon completion of our initial
research of the overall operation, we begin conducting interviews with
the chief executive officer and the senior management of each division
to get an understanding of their view of the company business model.
This process enables us to better understand our client's business model
and also helps us evaluate the quality and proficiency of management.
Additionally, we conduct similar interviews with middle level management
and operational staff in order to refine our business model analysis.
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● REPORTS |
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Through "SWOT" analysis, we define the Strength, Weakness, Opportunity, and Threats
of our target enterprise. SWOT can also be recursively applied for
each of the divisional operations as well. To attain a comprehensive
understanding of the situation, we quantify the results of our SWOT analysis
and zero in on the factors--both internal and external--that produced them.
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Market Analysis:
A market analysis involves examining both the market that the business belongs to, as well as the effects of the product presence in the market. To substantiate our findings, we conduct interviews with top executive managers in the same industry, and take into consideration the published reviews of trusted analyists and the statistics and data complied by both the government and local public organizations. We occasionally visit industry specialists to hear their take on current and past conditions of the market, as well as its past tendencies and future prospects.
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Competition Analysis:
Analyzing the similarities and differences between the main competitors and the client company serves to clarify its relative strengths and weaknesses within the industry. In this comparative competition analysis, we mainly utilize the Key Performance Indicator (KPI). Using either this (or some other comparable evaluation index) it is possible to obtain a quantification of the company's proficiency level in different areas of business performance. This enables us to focus in on the poor performance aspects that require improvement and restructuring.
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Revenue Analysis:
Based on our findings from the SWOT analysis, our financial due diligence is put together as a comprehensive evaluation. The data from past sales and income are taken into consideration, and the profitability of the business is assessed. During revenue analysis, we pay close attention to any improvements that could be made to the Marginal Income Ratio（Gross Margin Rate）and Labor's Relative Share（Labor Cost÷Marginal Income Ratio).
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Cooperation with Local Community:
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The local chain that connects the the consumer to the supplier is made up of a series of business activities that include development, procurement, manufacturing, delivery, and sales. It is important to look at how the supply chain will be affected by the restructuring and acquisition. Also, because relations with the regional economy closely influences the supply chain, the proper public relation tasks should be performed as part of the financial and business restructuring of large-scale facilities. Our due diligence does not overlook either of these details. |
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Mortivation Management:
The effect of achieving business due diligence often results in M&As and business restructuring that drastically changes governance and organization within the company. Time after time, we have observed a decrease in the motivation of indispensable talent, and this invariably leads to the harmful decrease of business value. For this reason, we sometimes make use of the services of human resource specialists who will conduct an investigation to check the attitudes of employees. If necessary, we are ready to implement custom-made programs to restore and boost the motivation levels within the corporation.
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Copyright (C) 2006 JHK International Partners all rights reserved |
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