Classification and characteristics of commercial due diligence consulting: differences and commonalities in different industries

Definition and purpose of 1. commercial due diligence consulting

Commercial due diligence consulting refers to a comprehensive, in-depth and objective evaluation and analysis of the market, finance, law, technology, management and other aspects of the target enterprise or project before major decisions such as mergers and acquisitions, investment and cooperation. The purpose of commercial due diligence consulting is to provide decision makers with accurate, reliable and timely information to help them identify risks, identify opportunities, develop strategies and optimize transactions.

The importance of commercial due diligence consulting is self-evident. It can help decision makers:

Understand the real situation of the target enterprise or project to avoid blind decision-making or being misled;

Identify the strengths and weaknesses of the target company or project, and determine the value and potential;

Identify the risks and problems of the target enterprise or project, and formulate countermeasures and solutions;

Discover opportunities and room for improvement in the target company or project, and develop value-added and optimized solutions;

Develop a reasonable and effective transaction structure and terms to ensure the smooth and successful transaction.

Classification and characteristics of 2. commercial due diligence consulting

The content and methods of commercial due diligence consulting vary according to different industries and purposes, but there are also some common principles and steps. Generally speaking, commercial due diligence consulting can be divided into the following categories:

Market due diligence consultation. Market due diligence consulting refers to the evaluation and analysis of the market environment, competitive situation, customer demand, market share, market potential and other aspects of the target enterprise or project. The purpose of market due diligence consulting is to provide decision makers with information on the market positioning, market opportunities, market risks, and market strategies of the target company or project. The methods of market due diligence consulting mainly include market research, competitive analysis, customer analysis, market forecasting and so on.

Financial due diligence consulting. Financial due diligence consulting refers to the evaluation and analysis of the financial position, financial statements, financial indicators, financial risks and other aspects of the target enterprise or project. The purpose of financial due diligence consulting is to provide decision makers with information on the financial value, financial stability, financial compliance, and financial adjustment of the target business or project. The methods of financial due diligence consulting mainly include financial audit, financial analysis, financial modeling and so on.

Legal due diligence advice. Legal due diligence consulting refers to the evaluation and analysis of the legal situation, legal documents, legal risks and other aspects of the target enterprise or project. The purpose of legal due diligence consultation is to provide decision makers with information on the legal legitimacy, legal protection, legal liability and legal advice of the target enterprise or project. The methods of legal due diligence consultation mainly include legal review, legal analysis, legal advice and so on.

Technical due diligence consultation. Technical due diligence consulting refers to the evaluation and analysis of the technical status, technical level, technological innovation, technical risk and other aspects of the target enterprise or project. The purpose of technical due diligence consulting is to provide decision makers with information on the technical advantages, technical potential, technical barriers, and technical improvements of the target enterprise or project. The methods of technical due diligence consultation mainly include technical assessment, technical analysis, technical verification and so on.

Management due diligence consulting. Management due diligence consulting refers to the evaluation and analysis of the management status, management team, management system, management risk and other aspects of the target enterprise or project. The purpose of management due diligence consulting is to provide decision makers with information on the management capabilities, management efficiency, management culture, and management optimization of the target enterprise or project. The methods of management due diligence consultation mainly include management evaluation, management analysis, management interview and so on.

The main characteristics of commercial due diligence consulting are as follows:

comprehensiveness. Business due diligence consulting should conduct a comprehensive evaluation and analysis of all aspects of the target enterprise or project, without omitting any information that may affect decision-making, while considering internal and external factors, as well as macro and micro levels.

commonality of research principles. The research principle of commercial due diligence consulting is to ensure the quality and efficiency of the research, which usually includes the following aspects:

Determine the objectives and scope of the research. Before starting the research, it is necessary to clarify the purpose, object, content, method, time, resources, etc. of the research in order to formulate a reasonable research plan and arrangement.

Collect and validate information from the survey. When conducting research, it is necessary to collect relevant information from a variety of channels and methods, including public information, internal information, first-hand information, second-hand information, etc., and effectively verify and screen the collected information to ensure The authenticity and reliability of the information.

Analyze and evaluate the results of the research. After completing the research, it is necessary to systematically analyze and evaluate the collected information, and use appropriate models and tools to quantify and qualitatively judge and evaluate the value and risk of the target enterprise or project from different angles and levels.

Write and present research reports. After analyzing and evaluating the results of the research, the process and conclusions of the research need to be organized into a clear report, including the background, purpose, methods, content, results, recommendations, etc. of the research, and presented to the client in an appropriate form and manner so that the client can understand and utilize the results of the research.

commonality of research steps. The research step of commercial due diligence consulting is to ensure the process and effect of the research, which usually includes the following stages:

The preparation phase. At this stage, it is necessary to communicate with customers, understand their needs and expectations, determine the objectives and scope of the research, develop research plans and arrangements, allocate research teams and resources, and collect and organize relevant background information and preliminary information.

The execution phase. At this stage, it is necessary to conduct field research and research according to the research plan and arrangement, collect and verify relevant information from various channels and methods, including interviews, questionnaires, observations, data collection, data analysis, etc., and record and organize the research process and findings.

analysis phase. At this stage, it is necessary to systematically analyze and evaluate the collected information, apply appropriate models and tools, and make quantitative and qualitative judgments and evaluations of the value and risks of the target enterprise or project from different angles and levels, and put forward the conclusions and recommendations of the research.

The reporting phase. At this stage, the process and conclusions of the research need to be organized into a clear report, including the background, purpose, methods, content, results, recommendations, etc. of the research, and presented to the client in an appropriate form and manner so that the client can understand and use the results of the research.

The case of 5. Champ Consulting

Shangpu Consulting Company is a professional business due diligence consulting company with rich industry experience and professional knowledge to provide customers with high-quality business due diligence consulting services. The following are some specific cases provided by Champ Consulting for clients to demonstrate the value and effectiveness of commercial due diligence consulting.

Case 1: Provide M & A due diligence consulting services for an international manufacturing group. The group plans to acquire a Chinese manufacturing company to expand its share and influence in the Chinese market. Shangpu Consulting Co., Ltd. provided the group with comprehensive M & A due diligence consulting services, conducted in-depth evaluation and analysis of the market, competition, customers, products, finance, law, risks and other aspects of the target enterprise, found the advantages and disadvantages of the target enterprise, as well as potential risks and problems, and provided the group with suggestions on reasonable transaction price and transaction conditions, helped the group successfully complete the M & A transaction and achieve its strategic objectives in the Chinese market.

Case 2: Providing investment due diligence consulting services to a domestic service enterprise. The company, a professional education and training service provider, plans to invest in an emerging online education platform to expand its online education business. Shangpu Consulting Company provides professional investment due diligence consulting services for the enterprise, and makes a detailed assessment and analysis on the market prospect, competitive advantage, profitability, growth potential, rate of return, exit mechanism and other aspects of the target platform, finds the value and potential of the target platform, as well as possible risks and challenges, and provides the enterprise with a suitable investment amount and investment return forecast, helped the company successfully complete its investment decisions and achieve its online education business development goals.

Case 3: Cooperative due diligence consulting services for a foreign financial institution. The institution, a well-known investment bank, plans to cooperate with a Chinese financial technology company to provide more financial services and products to Chinese customers. Shangpu Consulting Company provides professional cooperation due diligence consulting service for the institution, and conducts a comprehensive evaluation and analysis on the service quality, customer satisfaction, service innovation, human resource management, brand image, market share and other aspects of the target company. It discovers the advantages and disadvantages of the target company, as well as the opportunities and threats of cooperation, and provides the institution with suggestions on reasonable cooperation mode and cooperation terms, helped the organization to successfully establish a cooperative relationship with the target company and achieve its expansion goals in the Chinese market.

Conclusion

Business due diligence consulting is an important consulting service, which provides reliable information and suggestions for enterprises before making major decisions, helps enterprises make correct decisions, avoids potential risks and maximizes value. The content and methods of commercial due diligence consulting vary according to different industries and purposes, but there are also some common principles and steps. Shangpu Consulting Company is a professional business due diligence consulting company, providing customers with high-quality business due diligence consulting services, as well as specific cases, showing the value and effect of business due diligence consulting.