Acquisition Strategies and Organizations Acquisition

Acquisition Strategies and Organizations

Acquisition in organizations is a practice which involves the takeover of a smaller firm by a larger firm, usually acquisitions are done for purposes such as the elimination of the competition from competitor, for the sake of survival of the company itself or just for the motive of making profit. "Observe all the competition before making any formal approach towards acquisition" (MacWhinney, 1987). There is, however one important thing, the main firm should thoroughly assess the market value of the target firm because the main firm would not want to pay more than the actual value of the target firm. "The target firm should be thoroughly assessed before taking any decision on the buyout" (Smith, 2000). Let's look at the acquisition strategies of two multinational giants and asses their acquisition strategies.

Google

The acquisition strategy used by the firm Google is much advanced as compared to firms with related businesses, the top level management of Google mingle with managers of different industries which helps them in keeping up-to date about the potential competition and possible purchases. Most of acquisitions done by them come as a surprise to others and seem to be done in a much random manner but they only seem to be random. Besides human resources, Google makes use of great research technology which is availed to them, it is the main source for Google's competitiveness and advantage in investing.

They know everything regarding from what the customers desire to the desires of the advertisers. They are well aware of the techniques used by different publishers in monetizing their adverts. Having a search engine has its own advantages such as the knowledge of the movement of web traffic in advance. 'GoogleBots' travel all across the internet in finding trends as well as indexing keywords and different other available contents.

This makes Google more aggressive in bidding for a firm while all of their competitors are still planning on bidding. With their massive data acquisition techniques as well as technology for gathering statistics (GoogleBots, Maps, Web Search and so on) they connect the data available to create a bigger picture. This greatly assists Google in assessing the worth of any firm and therefore decides about its possible acquisition (if acquisition will be held then it also determines the price which should be offered for the acquisition).

Estimating the worth of a firm can have many factors, some of which are the size of its customer market, the overall growth rate and growth potential of the firm, the competitors facing the firm, any other sort of potential investors which may involve in acquisition and the overall market potential of the target firm.

Although all of these tools and techniques are used by many other internet search engines but Google has a much more complex and advanced system, it is not perfect but has given Google the edge over its competitors time and time again.

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