Stroudwater was retained to help a rural affiliate evaluate its affiliation options. During the process, our client received multiple competing proposals. One of the leading proposals was from a natural referral partner, a leading not-for-profit system in the region. This prospective partner was highly regarded and had multiple rural affiliates. They spoke convincingly of their commitment to their rural affiliates and the rural communities they served.
As part of our due diligence process for finalist candidates, Stroudwater Associated examined the pre-and post-affiliation performance of the rural affiliates of each finalist. Surprisingly, every rural affiliate of this finalist had a significant drop-off in market share post-affiliation. This track record was not consistent with the values and approach that they had shared with our client.
In each instance, this prospective partner was able to identify the underlying cause of the market share decline; what they could not explain was how to reconcile their rhetoric with their reality across all these communities. Fortunately for our client, the other finalists had experience that better matched their rhetoric, and our client was able to select a preferred partner with an excellent performance history of investing in and enhancing their rural affiliates.
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