logo image

Merger and acquisition strategy

The reasons for the materialization of the mergers and acquisitions is primarily concerned with long term business concerns such as competition, efficiency, marketing, product, resource and tax issues. Kodak’s approach was to gain through focus which was the factor ignored in the Polaroid working model: Reduced Competition: Acquiring a competitor is an excellent way to improve a firm’s position in the marketplace. It reduces competition and allows the acquiring firm to use the target firm’s resources and expertise.

(Project Planning and Management — An Integrated System for Improving Productivity, 2003) Cost Efficiency: Due to technology and market conditions, firms benefits from economies of scale. The assumption is that larger firms are more cost- effective than are smaller firms. Improve Earnings and Reduce Sales Variability: Improving earnings and sales stability can reduce corporate risk. If a firm has earnings or sales instability, merging with another company may reduce or eliminate this provided the latter company is more stable.

(Project Management — How to Make It Work, 2004). Market and Product Line Issues: Mergers occur to gain a share of the market that the other company wants to enter. All of the target firm’s experience and resources are readily available of immediate use and

Need essay sample on "Merger and acquisition strategy"? We will write a custom essay sample specifically for you for only $13.90/page

is the common reason for acquisitions. (Managing Projects, 1984) Acquire Resources: Firms wish to purchase the resources of other firms or to combine the resources of the two firms.

These may be tangible resources such as plant and equipment, or they may be intangible resources such as trade secrets, patents, copyrights, leases, management and technical skills of target company’s employees, etc. (Managing Business and Engineering Projects Concepts & Implementation, 1990) Synergy: Economies of scope would occur if two companies combine and the combined company was more cost efficient at both activities because each requires the same resources and competencies. (Applied Project Mgt. for the Process Industries, 1974).

Kodak invested big in acquisitions as part of corporate restructuring by which the company over took another to become the owner of the target company. The key principal behind buying the company was to create shareholders value over and above that of the sum of the two companies. The two companies together are more valuable than two separate companies with an idea to attract companies when times are difficult which will lead to create a more competitive and cost effective company.

The most essential economic theory in the success story researched is the concept of monitoring and control which involves knowing the status of a decision and control involves comparing the actual status with the plan, find out the deviations and initiating corrective actions so that the original plan can be fulfilled. Corrective actions lie at the core of successful project management which should have a system to measure the results effectively at pre-determined intervals, comparing them with the planned results and deciding and taking corrective actions.

The below path undertaken helped Kodak rise over Polaroid in the core business domain of photography.

References

1. Beaumont,P. B. , Applied Microeconomics for Decision Making, Sage Publications, London,1993 2. Hitt, Michael A, (2001), Strategic Management: Competitiveness and globalization, 4th ed. , Thomson Learning. 3. Srivastava, R. M. (1999). Strategic Planning: Formulation Of Corporate Strategy (Texts and Cases) 1st ed. , Macmillan Limited. 4. Hamel,G, Collaborate with your Competitors and Win, Harvard Business review,67,1,1989,133-9. 5.

Porter, M. E. , (1980). Competitive Strategy: Techniques for analyzing industries and competitors, Free press, New York. 6. Hitt, Michael A, (2001), Strategic Management: Competitiveness and globalization, 4th ed. , Thomson Learning. 7. Srivastava, R. M. (1999). Strategic Planning: Formulation Of Corporate Strategy (Texts and Cases) 1st ed. , Macmillan Limited. 8. Hamel,G, Collaborate with your Competitors and Win, Harvard Business review,67,1,1989,133-9. 9. Clifton, David S. & Fyffe, 1977. , David E. Project Feasibility Analysis. A guide to profitable New Venture. John Wiley & Sons, New York

Read full document

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
×
Sorry, but copying text is forbidden on this website. If you need this or any other sample, please register
Signup & Access Essays

Already on Businessays? Login here

No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy