Why Build When You Can Buy: The Value Of Mergers And Acquisitions

Imagine you're racing against time in a booming industry. Your competition just launched a game-changing feature, investors are pressing for scale, and customers are demanding more. You have two paths: spend years building capabilities from the ground up—or fast-track your way through a smart acquisition. The question isn’t whether to grow; it's how to grow. And in the fast-evolving world of business, mergers and acquisitions (M&A) are becoming the shortcut many ambitious companies are choosing.

At the heart of every major growth decision is a classic debate: should you build internally or buy externally? The "build vs. buy" question is especially critical when expanding into new markets, adopting new technology, or acquiring key talent. While organic growth has long been seen as the traditional route, today’s hyper-competitive and tech-driven landscape often rewards speed, and that’s where M&A comes in.

Building: Organic Growth Through Internal Expansion

Choosing to build internally means developing capabilities within your own organization. This could involve launching new products, hiring specialized talent, or investing in R&D. The benefits? Full control, cultural consistency, and a gradual, manageable pace of growth.

However, organic growth also comes with significant drawbacks. It requires time, patience, and resources. There's a risk of missing market opportunities while slowly developing capabilities. Your competitors might scale faster, innovate quicker, and capture the market before you even launch.

Moreover, internal expansion often depends on existing talent bandwidth, infrastructure limitations, and leadership capacity—all of which can create bottlenecks during periods of aggressive scaling.

Buying: Expansion Through Acquisitions

Acquiring a company can be a transformative shortcut. It offers immediate access to customers, revenue, intellectual property, and established teams. For companies looking to diversify their offerings, enter new markets, or boost innovation, acquisitions can eliminate years of trial and error.

That said, buying isn’t without its pitfalls. M&A comes with financial risk, integration challenges, cultural misalignment, and sometimes, unexpected operational hurdles. A poorly executed acquisition can damage brand reputation, frustrate employees, and dilute core value propositions.

Nonetheless, for businesses needing speed and competitive advantage, acquisitions offer a compelling edge—especially when time-to-market is critical.

Build vs. Buy: Key Factors to Consider

So, how do you decide? Several core considerations guide the build vs. buy decision:

1. Time-to-Market: If speed is essential, buying is often the better route.

2. Capital Availability: Do you have the budget for an acquisition? Or is it more feasible to invest gradually?

3. Strategic Alignment: Does the acquisition target complement your long-term goals, or are you better off cultivating those capabilities in-house?

4. Cultural Fit: Can your teams integrate well, or is cultural harmony easier when building internally?

5. Talent Needs: Can you hire and train the right people, or would an acquisition bring in a ready-made, experienced team?

Impact on Employees, Customers, and Competitors

Employees: Building internally can foster employee growth, loyalty, and cultural stability. It offers career development opportunities and minimizes disruption. Conversely, acquisitions may lead to redundancies, role overlaps, or cultural friction. However, they can also inject fresh talent and energy into the organization, reinvigorating teams with new perspectives.

Customers: Organic growth typically ensures a consistent customer experience, as changes happen gradually. M&A, on the other hand, may cause confusion or service interruptions if not executed properly. Yet, successful acquisitions can greatly enhance value to customers by expanding offerings or improving service through new capabilities.

Competitors: When you build slowly, competitors have time to react or even outpace your strategy. Buying gives you an edge, often catching competitors off guard and instantly shifting the competitive landscape. Acquisitions can signal strength, disrupt markets, and deter others from entering the space.

Real-World Example: Jungle Scout

Greg Mercer, founder and CEO of Jungle Scout, chose the "buy" path to accelerate growth. Instead of slowly building complementary tools, he strategically acquired companies like Downstream Impact and Forecastly. These acquisitions gave Jungle Scout an edge in advertising analytics and demand forecasting—key areas for Amazon sellers.

Mercer emphasized that building would have taken years, delayed customer value, and risked losing market leadership. By acquiring, Jungle Scout expanded its product suite rapidly, retained customers, and positioned itself as the go-to platform in its space. His story perfectly illustrates how well-timed acquisitions can outpace organic growth in today’s hyper-competitive environment.

The Decision between Building and Buying 

The decision between building and buying underscores a nuanced strategic dilemma that companies must face as they scale. Building offers long-term control, cultural continuity, and tailored growth—but it can be slow and resource-intensive. Buying, on the other hand, enables fast access to new markets, technologies, and teams—yet comes with integration hurdles, potential cultural clashes, and financial risk. The real challenge lies not just in choosing a path, but in executing it well. Success in the world of mergers and acquisitions is shaped by how effectively a company aligns its chosen strategy with its vision, agility, and long-term objectives.

Need an Advisor?

For startups and SMEs across the MENA region, navigating the complexities of mergers and acquisitions can be overwhelming. That’s where Exits MENA steps in. As a specialized advisory boutique, Exits MENA supports businesses on both the buy-side and sell-side of the deal. Whether you're looking to raise capital, expand through strategic acquisitions, or find the right buyer for your company, their team ensures each step is aligned with your long-term growth goals. Learn more at www.exits.me.