Strategies for Success During Mergers and Acquisitions

Mergers and Acquisitions: The Case of Microsoft and EPAM

This paper focuses on Microsoft Corporation. The firm is one of the major public multinational corporations in America with headquarters in Redmond, USA. The company majors in developing, manufacturing, licensing, and supporting a broad scope of services and products that are especially predominant in the computing of various product divisions. The firm was established in 1975 with the goal of developing and selling BASIC interpreters to Altair 8800. Microsoft gradually rose to the dominance of operating system markets for home computers using the MS-DOS component from mid-1980s. This was followed by Microsoft Windows dimension of the operating systems. The firm, Microsoft, translated into a dominant office suite market for Microsoft Office. The company has often diversified as seen from recent interactions with the video game industry like the Xbox and the Xbox 360, its successor. The company had made an impact in the digital services and consumer electronics market with MSN, Windows Phone OS, and the Zune.

The initial public offering of the company was presented in March 1986. The company stocks eventually hit U.S.$27.75 for each share with a peak of $29.25 for the shared markets that were open for extensive trading. The focus of the offerings enabled Microsoft to have market capitalization in terms of $519.7 million. The firm has acquired close to 146 companies and purchased considerable stakes in 61 major companies (Gleich, Kierans & Hasselbach, 2010, pp 72). The company registers a full scope of divestments. From the companies, Microsoft has acquired close to 107 based in United States of America.

Microsoft remains salient on disclosures of financial details for the mergers and acquisitions. This paper also focuses on the company acquisition of Network Managers in the Systems design industry on July 10, 1995. The Network Managers Company was based in the United Kingdom. It will also analyze EPAM Systems Inc. A company that is only based in the U.S. The firm provides a broad array of sophisticated solutions in software engineering and technology services that have capacity distributed across the country (DePamphilis, 2010, pp 91). The company has a fundamental focus on building extensive and lasting partnerships with different clients in the industry while demanding for technological advancement of solutions and skills. Strategic partners include independent software vendors, and technology specialists, banking and finance professionals, business media and information persons, and consumer and travel agents. The firm delivers services to customers based in North, Western, Central and Eastern America. Arkadiy Dobkin and Leonid Lozner established EPAM Systems in 1993 at Newtown, PA.

In the global economy, the trends in international business are rebound towards recent economic downturns with companies across the world looking towards extensive growth. The elements of growth are compounded based on bottom lines without sufficient components. In business management, Microsoft Corporation takes a holistic approach towards growth while identifying alternative business opportunities that extend the existing customer relationships while improving internal systems (Yurov, 2008, pp 172). The approach creates an opportunity of making acquisitions that allow for boosting of the firm's competitive advantage across the periods given. Growth based on strategic acquisition allows for opportunities for building value and positioning the business for industry success. While the elements have relative reasons of growth in the market, the increment of earnings and income will be based on maintaining competitive advantage (Sirower, 2010, pp 82). For instance, the perception of growth in business is one of the essential elements of long-term performance strategies that are typically overlooked. The growth of Microsoft Corporation is one of the important goals in the company's history requiring potential acquirers to develop performance interests.

Microsoft Corporation's strategy on acquisition adds scale to the business portfolio while demonstrating the company's management focus coupled with wherewithal on proper implementation of growth strategy (DePamphilis, 2010, pp 121). The company also has the relative perception of stable corporate entities with an in-depth management of intellectual property and barriers to entry. For instance, there are concepts of commanding broader selling prices. Success in targeting right acquisition begins with industry analysis coupled with assessment of identified goals based on various aspects of criteria, such as size, profitability, management weaknesses, growth rate, services and products, geographic location and strengths. The process as practiced by Microsoft Corporation is a way of dissolving growth principles to advance on growth. The approach also helps in ensuring that the focus groups target capacity for additional acquisition elements in terms of company strengths and mitigation of weaknesses (Sirower, 2010, pp 82).

Microsoft Corporation is in a position of objectively valuing alternative businesses with respect to the fundamental growth capabilities. The approach also tends to attach lower value to the competing companies as compared to existing trends. The elements of a given market, and the virtually constituent business profiles, have disconnect and inevitable provisions of personal connection to the acquired company. Further, it is wise for Microsoft Corporation to pursue acquisition strategies in gaining in-depth understanding of market comparables, and relevant valuation techniques. The understandings of Microsoft Corporation's business valuation helps acquire eliminate the unrealistic low bids and overpayments (Sherman, 2011, pp 66). Integration is one of the real impediments to the success of the acquisitions. Irrespective of the ideal company and perfect fit, Microsoft Corporation cannot be integrated successfully with the acquired company without realizing the existing benefits. There are different aspects of the integration processes where business workforces and cultures should acquire emerging needs for financial restructuring and requirements of credit agreements that are revisited on incentives and compensation reconciled in the systems. Prior moving into acquisition, Microsoft Corporation's integration strategy will have careful consideration and planning for the markets in the United Kingdom (Hoffmann, 2012, pp 82).

In a build-up, Microsoft Corporation decides whether to expand based on acquisitions or organic growth. The decision invites different market responses and reaction values. The critical factor involved in the determination of appropriate strategies for competitive growth is whether the firm can adopt "strict" approaches to competition. This is a case of increasing market shares in the expensive elements of the competitors. The accommodating plans promote resultant value creation shared benefits of the rivals (Yurov, 2008, pp 92).

The other important factor includes how competitors are expected to form a reaction of strict and accommodating stances. The approaches also depend on the industry characteristics. Microsoft Corporation specifically operates on the competitive actions that reciprocate and contrarian the competitors' reactions. There is the similarity in implementing fair treatment and opposite forms of taking advantage of various accommodating stances (Gleich, Kierans & Hasselbach, 2010, pp 82). The competitive reactions have typical reciprocation of respected price competition. In such case, prices move through the firms while expecting to have matches of competing firms. In contrast, the competition levels are based on quantities or capacities regarded to as contrarian.

Capacity expansion for Microsoft Corporation includes capturing larger market shares through pre-emptive competitor's growth outcomes in lower incremental positions for the competitor. The firm distinguishes the competitive investment strategies based on competitive stances (such as robust or accommodating) (Yurov, 2008, pp 92). The focus also dwells on the scope of competitive reaction for reciprocating and contrarian dimension. The firm's competitive landscape takes different aspects of higher growth despite the extensive opportunities for profitable capacity expansion. In such conditions, industry investment opportunities are faced with competitors that give rise to the views of value capture games.

The higher industry growth enhances the organic capacity expansion in particular firms with the likelihood of success over the competitor's capacity. This limits the risks of the adverted intensified competition. Microsoft Corporation's optimal route in the circumstances includes seizing the advantage through taking considerable initiatives (Sherman, 2011, pp 87). The aggressive build-up strategies are generated through first-mover advantages in firms while taking tough positions. The competition retreats ensure that large firms involved in gaining market shares become industry leaders in the sector growth. The absolute strategic value for the buy-and-build strategies includes further consideration of strategic preemption values in timing investment opportunities. The issues also have responsive regard to alternative players and the strategic reaction value that reflect the impacts of market's response to the profits.

Ownership structures have an emergence of various privatization programs within the economies and transition of the produced and concentrated ownership trends for outsiders (Sirower, 2010, pp 63). The acquired company has finance growth for modernizing technology while providing required marketing skills. For instance, internal owners have majority-voting control for majority firms in the region while undergoing ownership transformation. Microsoft Corporation dominates the transition economies and generates resources required in restructuring development activities. For such reason, the acquired companies are under the control of governmental agencies coupled with strategic restructuring of acquisitions (DePamphilis, 2010, pp 27). The potential foreign investors away from the America markets are used in the UK economy in penetrating internal geographic markets. The firm has survived well due to impacts of the financial crisis and the recession. The concept is attributed to the limited exposure and low levels of integration.

On the other hand, recent industry data shows that less demand, and tightening of the financing conditions, have drastic the changes within the international environment that affect the existing economies. Economic policy developers believe in protectionist tendencies with the avoidance of crisis times (Gleich, Kierans & Hasselbach, 2010, pp 91). The existing anti-crisis measures lack the control of discriminate foreign and domestic, commercial entities. The commitment continues to have programs of privatization firms in direct and indirect state ownership. However, the most appropriate time for such activities involves processing accelerated exits from the state of company property to portfolios of state funding. The capital and restitution fund in the company ensures a critical remainder of state-ownership having relevant shares and considerable improvements that take place in corporate governance (Sherman, 2011, pp 72). The developed principles and guidelines for corporate governance have the particular focus on state-owned enterprises. The steps taken in improving the roles of such states of the economy are based on private business initiatives and other respective responsibilities.

In part, EPAM Systems Inc. operates in literature based on an industrial organization and management expectations of the relative components of M&A. The issues also have regard for M&A's perspective on superior economic performance due to synergetic effects following the existing forms of economies along scaling and scoring. However, EPAM Systems Inc. identifies alternative groups of authors based on contradicted results (Hoffmann, 2012, pp 82). The groups of systems used by EPAM Systems Inc. involve massive investments in internal systems and proper management of organizations using 'sticking to knit' strategies. The focus also investigates conceptual argument for which acquisitions have a relative product, market strategy, and technological term created through higher value as compared to the unrelated acquisitions. The related assets have a greater dollar gain as compared to unrelated acquisitions. The acquired firms have relative acquisitions based on substantial gains within the acquired firms and unrelated acquisitions (Gleich, Kierans & Hasselbach, 2010, pp 81).

The findings also indicate the relative target companies that benefit the purchase relations of target firms. The examined impacts of symbiotic relationships are components of diversification in breadth and firm performance mode. Most competitor firms have a classification of diversification extent against substantive methods and performance of the region (Yurov, 2008, pp 82). EPAM Systems Inc. analyzes various financial performance measures that are related to categories of higher performers as compared to hypothesized categories. However, the differences do not have significant implications for performance measures. The external groups are apparent in the worst performing sections and presentations of dilemma in the strategic forms of dominated conglomerate movements.

The EPAM Systems Inc. findings suggest strategic complementarities could be important antecedents in business performance. Resource-based approaches suggest that the firms bundled assets with fungible concepts of performance nature. The extent to which the resources have fungible outcomes means that the firms are in a position of redeploying their entrants in new markets while the existing businesses cause a decline. The examination of strategic performance shows difference in outcomes against the diversification-oriented and consolidation-oriented acquisitions from the industries in this sector. The issues are based on experiences of significant decline (DePamphilis, 2010, pp 172). The outcomes also indicate the consolidation-oriented outperforming diversification-oriented acquisitions from reduction industry phases. EPAM Systems Inc. develops independent strategies based on stock market-based and operating performance measures. The strategic implication of such outcomes is that the assets face the extensive decline of industries as redeployed in effective market mechanisms as compared to within firms of complementary acquisition assets (Sirower, 2010, pp 82).