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.