POTENTIAL RETURNS ARE BOUNDED by revenue. Growth in revenue releases that constraint. So an expectation of strong and continuing growth in revenue represents substantially more value creation potential.
To look at the role of acquisitions in profitable growth, the following four generic vectors of growth must be examined:
1. Growth within a current market with current product offerings.
2. Growth within a current market with new products.
3. Growth into a new market with current products.
4. Growth into a new market with new products.
In each case there would be a make verses buy decision.