A verification of the business model sustainability is also one of the main objectives of a Strategic and Commercial Due Diligence. Also known as the Strategic or Market Due Diligence, it mainly focuses on the inquiry into the company’s strategic planning („inside-out“).

Strategic and commercial due diligence is often necessary because the internal premises of the company’s business plan as well as its assumption about the future prospects for it are often afflicted by an undesirable degree of uncertainty. It provided a valuable check as compared to a mainly past-driven audit of the company’s financial figures. 

A market and competition analysis (as described above) is therefore a foundation of every strategic due diligence. However, it is complemented by: 

• Investigation of the market and cost-driven opportunities and threats of crucial consequence to the company’s future development and thus to the ultimate success of an investment or takeover.

• Examination of the quantitative estimates concerning the merger synergeis on the market or resource side of the business.

• Critical review and verification of the reported benchmarks and financial figures entering the business case calculations (e.g. sales and marketing expenses, product contribution margins, etc.).