Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Essay:
Merger, Acquisition and International Strategies
Mergers, Acquisitions and International Strategies
A merger is a combination of two or more business entities with the aim of consolidating the resources that they have and creating a single entity with that. The process of merging is done through acquisition or direct pooling together of the resources available. Acquisition occurs when a firm buys a stake in another firm and assumes control of it. Acquisitions are part of growth strategies paid for in cash, payment through stock of the acquiring company or both. Mergers and Acquisitions commonly denoted by M & A work hand in hand and are in recent times seen as one. M & A is a strategy of finance and management dealing with the selling, buying, combination of, firms and entities to help grow a firm rapidly. M & A occur to help a firm create a new strategy, joint venture or pursue a new line of business, which will be beneficial for both companies. Some of the reasons for M & A are synergy where a company will want to cut cost and increase productivity; it is also a way of eliminating competition, growth and diversification of the business where a company seeks to venture into a new line or wants to broaden its scope.
General Motors Corporation commonly known as GM is an American multinational Corporation that deals with automobiles. It was started in 1908 and is currently the world largest automotive maker. Its line of business is spread around the world to close to 160m countries. Some of the brands that are associated with General Motors' include Cadillac, Chevrolet, GMC, and Opel among many others. GM is a public Company having had its initial public offer in 2010. General motors' owes most of its success to mergers and acquitisitions, Since its inception in 10908, General motors has added more brands into the company through mergers and acquisitions. The majors and acquisition shave helped it expand its line of business and product offering. It has also been significant in helping the brand come up with better research and development strategies that have bolstered the vehicle maker as a market leader. In addition, GM has been able to grow in leaps and bounds to where it is today. After its inception in 1908, the company acquired a firm known as Oldsmobile. In 1909, GM acquired Cadillac and Oakland, which further helped the firm increase and diversify its product that was becoming popular. They also acquired a truck manufacturing company called Reliance Motor Track and Pontiac manufacturer Rapid Motor Vehicle Company. Due to the large sums of money that had been used to acquire the smaller firms and subsequently increase the product offering, the owner, William Durant lost control to the banks. He started Chevrolet after this and bought a significant controlling stake of GM. This led to the reorganization of the firm before it fell due to the fall in demand for motor vehicles caused by the world wars. Subsequently, the firm was reorganized and this led to the success it has achieved to date.
It is imperative to note that these acquisitions are the main reason for the success of GM. With each acquisition, GM was able to grow and increase its flagship products. It was able to have more brands in the business and this was a catalyst for growth of the firm. The horizontal mergers where the firm would acquire businesses that were its competitors helped the firm to achieve major strides in terms of growing its market share. It was able to eliminate the competition that would have affected its product share in the market. The acquisition strategy used by GM was the hostile acquisition where it had buys the firms in order to increase its market share and the number of products they had. In my opinion, I think the strategy that was acquired by GM at the time was a good one as they were able to become the market leaders. As at that time, the automobile business was relatively new. Not many people had cars or even saw the importance of those vehicles. This was therefore a major problem for them as they had a huge product offering and yet there was no much enthusiasm from the buyers. In addition, GM later on came to shed some of the lines of business that had been earlier acquired due to profitability issues. I however think that the acquisitions were good for the future of the firm.
Tesla Motors is a Silicon Valley firm that is widely known for designing and manufacture of the electric cars. Tesla motor is listed on the NASDAQ and is therefore a public company. Tesla also sells their electric engines to major motor companies. Tesla has several brands such as the Roadster and the Model S, which are increasing popular for the consumer who are environmentally conscious. Tesla is rapidly expanding and needs a larger product offering. Among the goals listed on their website is that Tesla starts selling vehicles in their own showrooms and selling of power trains to auto-car makers. It also lists its goals as becoming the catalyst for positive change among auto-car makers to become environmentally conscious about the environment. It also seeks to have SUVs and affordable electric cars for its customers and have increased sales and presence in show rooms and worldwide presence.
For a company such as Tesla Motors, expansion and having a larger product offering is one of their goals. Product research and development should also be another. Increasing their capital base is also another goal. As far as the increase in capital is concerned, the firm had its initial public offer where they raised a significant amount of capital, which helped them launch a few products in the market. Their vehicles are also luxury electric cars, which are vehicles people will buy because they want not because they need. Tesla therefore needs to have a clear-cut strategy on how they will face the market and achieve all its goals. Mergers and acquisitions are definitely not out of the question. The firm can decide to engage a few firms that specialize in the same. Among the firms, is General Motors. After the launch of the Tesla Roadster, General Motors was impressed and launched an electric car product the Chevrolet volt. GM being a huge firm with enough resources can engage with Tesla for a product development merger. The firm can also work in partnership with Peugeot, which already has a successful electric car flagship product called the Leaf. Tesla may decide to acquire their line of business and incorporate the technology into them and give it a wider scope and better product development base. Tesla motors also want to venture into the Sports Utility Vehicle market. They can acquire or merge with American electric Sports Utility Vehicle manufacturer, Phoenix Motor cars. This will give the firm the edge it needs as well as the technical knowhow to be able to manufacture such cars. Most of the electric car manufacturers collaborate with motor corporations in research and development. Such a merger will give the firm a huge base to be able to conduct their business as they so wish. It will also ensure that the firm has minimal competition in such a market which I what the future will be about. In addition, this will help the firm increase its supply chain as there will be more customers for the firm, which I personally believe, is a good thing for both firms.
General Electric Motors has a worldwide presence in North and South America, Asia, Europe, Africa and Oceania. The GM strategy is that they have a business, which is independent in every country but they set targets for each market. They also have a clear-cut strategy whereby they lay focus on the strengths of each market and work towards developing products that are tailor-made for each market. This strategy is called a brand for every place. Also part of their international Business Strategy is technology and innovation. The firm seeks to set itself apart from the rest by being able to come up with product offerings that are innovative and up to the ante in terms of the technology. The other area of focus in General Motors Strategy is as far as the environmental conservation is concerned. GM is creating product offerings that are fuel-efficient and products that use alternative energy sources. The environment is a major area of concern for any firm especially a carmaker where they have to be environmental friendly. The other area is in the Customer-focus. GM as part of its strategy wants to have a better focus with the clientele through establishing connections and giving the customers the edge to express themselves as well as assurances that their concerns are important to the firm. The firm seeks to create a good rapport whereby the customers will have their thoughts on innovation and product quality put into future…[continue]
"Merger Acquisition And International Strategies Mergers Acquisitions" (2012, December 01) Retrieved December 6, 2016, from http://www.paperdue.com/essay/merger-acquisition-and-international-strategies-83413
"Merger Acquisition And International Strategies Mergers Acquisitions" 01 December 2012. Web.6 December. 2016. <http://www.paperdue.com/essay/merger-acquisition-and-international-strategies-83413>
"Merger Acquisition And International Strategies Mergers Acquisitions", 01 December 2012, Accessed.6 December. 2016, http://www.paperdue.com/essay/merger-acquisition-and-international-strategies-83413
Acquisition Merger Acquisition International Strategies Merger, Acquisition, International Strategies Merger, Acquisition, International Strategies For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion. Corporation With around 12,000 employees, Yahoo is a multinational corporation that offers internet-based services. The company offers search engine,
Merger, Acquisition, And International Strategies Ford Corporation: The Volvo takeover It's imperative for the automotive companies to attain benefits of scale whilst developing latest products which is costing exceedingly high in the present business environment. Compared to the 90's the chances of attaining benefits of scale while saving costs has altered quite a bit. Model volumes have declined which creates difficulties for companies to attain economies of scale, while saving costs. Hence,
This acquisition gave Motorola the necessary services to expand their commercial divisions and also sell more effectively into enterprise-wide accounts. The use of mergers and acquisitions at Motorola for gaining differentiation and therefore delivering innovative solutions, freeing themselves from being a purely product-driven company illustrates how this strategy can be effectively used. References Abetti, Pier a (1994). Impact of technology on functional roles and strategies: Illustrative cases in the U.S.A., Japan,
International Marketing In many ways, domestic marketing and international marketing are similar. They are based on the same fundamental principles of using price, product, place and promotion to craft appeals to customers that will enhance sales. There are certain facets of international marketing, however, that are slightly different. Marketers need to be aware of what these similarities and differences are. In terms of similarities, the fundamental things that a company must pay
International mergers and takeover processes are positively influenced by efficient control by the parent country which may lead to the formation of a direct link between protection of investors and a companies' access to debt financing (La Porta et al., 1998 as cited in Martynova and Renneboog, 2008). Martynova and Renneboog in the year 2007 explained that debt financing is directly related to merger and acquisitions across the border
Finance-dominated proponents also maintain that boom economic periods generate a more varied divergence of valuations that fuel merger activity (Medlen 2007). In this regard, Medlen concludes that, "Taken collectively, these understandings may explain some of the merger activity in booms, but they involve certain asymmetries that undercut their explanatory power. High stock valuations allow stock to be utilized as currency and collateral for takeovers; yet stock booms also make
The conclusion whereat these researchers have arrived is that there is a negative mathematical relation between the probability of success of an M&a and the target company's leverage. An increasing leverage shows that equity is slowly substituted with debt, which reduces the fraction of voting right controlled by management and therefore affects the bidder's gain. Stultz finds that the probability of success of a takeover bid is decreasing as