Bon Appetit plc is a chain of restaurants in the UK operated in up-market. Now the company is at a point where it can see no opportunities for expansion using internal recourses. That is why the Corporate Strategy department is looking for suitable acquisition either in UK or overseas. Among their possible takeover targets are Coffee Ground plc, Starlight plc and Marrio Ferrino. II. The problem
Bon Appetit plc chooses a company to acquire with growth potential in order to increase their own profits, enhance its image and spend reasonably the present management’s time and energy. III. Cast of characters
Bon Appetit pls (UK): Type of business: a chain of restaurants offering top class cuisine Starlight plc (UK): Type of business: Ground floor restaurant + cabaret nightclub Mario Ferrino (Italy): Type of business: Delicatessen selling wide range of luxury food and drinks; Family owned company Coffee Ground PLC (London, UK): Type of business: Coffee shop serving drinks (mainly coffee) and food; Main customers: young and medium age people. IV. Chronology Nowadays – face the necessity of expansion
1970 – Bon Appetit was established V. Issues
1. Enhance image vs. Brand of the acquired company can appear to be stronger and Bon Appetit will fail to create a new image 2. Choose the company with good financial indicators and growth potential vs. Bon Appetit has to pay debts for the acquired company 3. Common management style vs. Wasting time and energy in order to change management in the acquired company 4. Stay in the same niche of food industry vs. Failure in handling questions of the unknown industry, become outperformed by competitors VI. Options
Taking over Mario Ferrino
If this merger will be...