Commercial Due Diligence (CDD)

An independent assessment of the target's market position, competitive dynamics, and revenue sustainability, conducted alongside financial due diligence.

Also known as: CDD, Market due diligence

One-line definition

CDD answers whether the business model and market support the financial projections — FDD confirms the history, CDD validates the future.

Typical scope

Market size and growth rates.
Customer segmentation and churn analysis.
Competitive positioning and barriers to entry.
Management's business plan stress-test.

Who does it

Strategy consultants (McKinsey, Bain, OC&C) or specialist boutiques, not the financial TS team. The two workstreams run in parallel and cross-reference each other.

Related terms

Financial Due Diligence (FDD)
An independent review of a target company's historical and projected financials, conducted for a buyer or lender before completing a transaction.
Vendor Due Diligence (VDD)
A due diligence report commissioned by the seller and made available to potential buyers, designed to accelerate the sale process.