MGT: 450 ESSENTIALS FOR STRATEGIC MANAGEMENT
INSTRUCTOT: TRAVIS WILLIAMS
January 23, 2011
In today’s market it is very important for company’s to remain competive in order to maintain an edge over its competitors. The days that a company can rely on its reputation to continue making profits are gone. Today, everyone is looking to save money by buying less expensive items like economy brands, considering that the diffrences between the two products are similar and the features that are not offered are of little value. This will make a consumer buy the less expensive item. Like consumers, companies are also looking to save money and maximize profit. One way of doing this is through acquisition strategies. Combining the operations of two companies is a very good option for companies that are looking to stregnthening the company’s competincies and competitiveness, this will ultimately open new market opportunities (Gamble/Thompson, p. 119). The benefit of this type of strategy, unlike alliances, they do not go far enough for the resources needed and a very important factor, ownership. In the following paragraphs, I will give two examples of two different companies in different industries and explain how they will stregnthen their market position through acquisiton, to include resources and competive capabilities. The first example I will use it Wells Fargo & Co. results from the acquisition of Wachovia Corporation. During the economic crisis Wells Fargo & Co. acquired Wachovia Corp in a bail out to keep the bank from going under. At one point Wachovia was Wells Fargo’s competitor. After the acquisiton it made Wells Fargo a banking giant absorbing its competion. Earnings from that acquisition have earned Wells Fargo Financial & Co. a 21% earnings since the acquistion, reporting record profits. This acquistion has allowed them to gain market share, this was mostly created by winning new customers....