My CEO Life

Over the last month i have been writing a series of articles on how the REA Group went global.  To date these articles have covered organic entry to new markets, acquisition based entry into Europe, Asia and the Middle East, how we structured ourselves to lead a global business and how we used internal consultants.  This article looks at once we acquired a new business, how we integrated that business into the REA Group.

Integration planning started long before an acquisition was completed.  During the due diligence process, we would look at the business we were acquiring and then systematically work out what level of integraton we would need in the businesss and over what period of time would we need to execute the integration.  Now when we thought about integration, we looked at the obvious things like finance, HR, systems and processes, products, marketing, and technology.  We also looked at cultural integraton and how we can bring the acquired company into the Group as an equal member.

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Over the last little while i have written about how the REA Group expanded its business internationally in a series called Going Global.  I have so far explored organic and acquisition based growth as well as the structure we put in place to manage a global Group.  This posting looks at how we used an internal productivity team to help drive knowledge sharing across the Group and at the same time to operate as a hit team when issues arise.

The internal consulting team was called the GPT – Global Productivity Team and reported into the Corporate function.  The team consisted of around 6 people who, in general, had long experience with the company and had earned their stripes through having operated in the field. 
The types of roles we had were consumer marketing, agent sales and marketing (classified sales), developer and third party sales (display sales), and editorial skills. 

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The first two Going Global blog posts were around how the REA Group (realestate.com.au Ltd) oganically entered the New Zealand market and how we acquired new businesses to enter Europe, the Middle East and Asia.

Having acquired the businesses, the next challenge for any CEO is how do you manage a global business in such a way that you encourage the local team grow as fast as possible while ensuring that the overall requirements of the of the company are met.  In addition, as the overall growth of the REA Group was being fuelled and financed by the highly successful perforamnce of the Australian business, it was important to ensure that the ongoing growth and success of the Australian business was not impacted.

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A couple of weeks ago, i wrote the first in a series of articles on going global.  In the first article, titled Going Global – Organic Growth Case Study, i talked about how the REA Group organically entered New Zealand through the establishment of a new site from scratch. The next step is to now look at acquisition based entry to new markets.   

Over the last 2 years, the REA Group has acquired 15 different businesses.  These acquisitions split broadly into capability enhancement, consolidation of existing markets and the entry into new markets.  The acquisitions that were entries to a new market include propertyfinder.com, casa.it, the atHome Group, propertyfinder.ae (UAE), and squarefoot.com.hk.  The first acquisition based entry to a new market was the purchase of propertyfinder.com in the UK. 

The initial experiments with moving into New Zealand demonstrated that there was the chance of creating value in these new markets.  However we also realised that organic entry was really only appropriate where we had an asset that we could leverage (e.g. the traffic to the Australian site) or where the market structure was early stage.  (See Analysis – Four Types of Property Portal Markets on our sister site – www.propertyportalwatch.com)

Therefore we identified that the next step in overseas expansion would have to be through acquisition and that due to the uncertainty associated with early stage markets, we focused on the maturing markets.  

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