How Did Sophia Acquire Tbs?

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How Did Sophia Acquire Tbs?

By | September 2010
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How did Sophia acquire TBS?

Executive summary
This assignment examines how Sophia, one of the largest cosmetics companies in the world, pursued a strategy of acquisition to grow the company. Sophia ’s main growth objective is market expansion and the development of a broad product portfolio. The acquisition targets they identified were TBS and The Lush. After analysing both companies’ strengths and weaknesses, TBS was selected since it could provide Sophia with the perfect platform to cash in on several fronts, e.g. the rise of the masstige segment, the potential to further target the BRIC countries (Brazil, Russia, India and China), the demand for natural and ethical beauty care and the opportunity to get closer to the end consumer through standalone stores and direct sales. On the other hand, Sophia can develop TBS with the support of sufficient funds to ensure ongoing brand enhancement.

There are several key issues related to acquiring company in accordance with the corporate objectives that are outlined in this assignment. These are marketing issues such as keeping TBS brand distinctive and retaining the autonomy of TBS’s management; regulatory issues related to limited horizontal overlap and concerns that the combined entity would increase a significant market share. The strategy for the acquisition was to maintain TBS as a standalone entity with its independent management style and exclusive distribution network for TBS products only. Sophia will develop visionary leadership to adapt TBS’s management in order to protect the brand identity. The takeover also will facilitate Sophia to move away from conventional cosmetics into more natural products, thus adopting TBS’s ethical approach.

Table of content

← Introduction
← Company overview
← Corporative objective
← Target companies
---The TBS
--- Lush
• Acquired company selection
--Benefit for Sophia
--Benefit for...

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