The target market, all enterprises respond to the target market investigation and screening, identify potential target enterprise. The choice of target enterprises in general need to pay attention to the following aspects:
1, correlation degree
Generally speaking, the law of enterprise development is to carry on the expansion on the scale in the industry have a certain advantage, to be followed by the longitudinal or the diversification and expansion. So, in the enterprise development stage, should try to choose the target business scope of the enterprise and the enterprise in the same or similar. When the development to a certain stage, the industry profit level limit, the enterprise is very difficult to obtain higher growth through horizontal M & A, can be vertical or conglomerate merger.
2, the scale of the enterprise
Regardless of the scale of the target company, the merger will incur a cost in the screening and evaluation of target enterprise. If the target enterprises is too small, the acquisition cost is relatively high; the target enterprise is too large, the success of the acquisition is relatively large. Usually, the acquirer must consider the suitability of the target enterprise scale from the following aspects: firstly, asset size. The larger assets of target enterprise, will lead to large merger price. M & a party if there is no enough money, will not be able to reach a purchase agreement. Secondly, the market target corporate influence. The index mainly include: market share, the main business income and gross margin. A large share of the market, gain the market opportunity is more easily after the merger. Finally, a potential target of the enterprise. The index mainly includes: the number of employees, product type, potential productivity, per capita output etc.. Potential target of the enterprise after M & a bigger, more easily achieve economies of scale.
3, development potential
The basic reason of enterprise merger is through the realization of economies of scale, the synergistic effect of therefore, has certain development potential in target market, but due to poor management and other reasons leading to poor profitability enterprise M & A is preferred. Measure the development potential of the target enterprise index, generally include: the enterprise market status, financial status, management, technology, legal matters, history and reputation.
4, financial space
Generally speaking, the target enterprises can accept the acquirer's management style and corporate culture, is the key to success of integration of cost and risk. Therefore, in the selection of target enterprise, should pay attention to these factors and the enterprise financing space, avoid the target enterprise in the personnel changes, affecting the normal business.

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