Effect of Business Acquisition to Get Competitive Advantage Based on the Case Study: Acquisition of Somerfield by Co-Operative Group
Effect of business acquisition to get competitive advantage based on the case study: Acquisition of Somerfield by Co-operative group
Background:
Business acquisition is one of the most vital tools to expand an existing business effectively. An acquisition takes place when an existing company buys another company which has more or less similar operating activities and ended up controlling it. It is clearly different from merger which is the integration of a business with another and sharing the control of the combined businesses collectively. Mergers and acquisitions (M&As) have long been considered as an one of the most highly appreciated method to achieve the desired growth rate and satisfying the key stakeholders. With rapid advances in science and technology competition for the same marker has increased significantly and to remain competitive in the market business organizations have considered M&As as an imperative strategic tool. Rising of new financing promises and changes in regulations have made M&As even more popular to create new market, maintain the existing market and acquiring unique technologies and intellectual properties. However, despite being considered as a pivotal business strategy to achieve target growth the general consensus is that more than eighty percent of the M&A fail to reach the desired financial goal (Nahavandi and Malekzadeh 1993) and fifty percent simply become unsuccessful (Cartwright and Cooper 1995; Child et al. 2001, Sally Riad. 2007). Although M&As have a high failure rate as suggested by previous results careful planning practices can increase the chance of their success. Although there is no rule of thumb that suits all situations in order to make a successful acquisition one must follow a few basic rules. Any purchaser no matter how the size of the company is must first determiw what strategic aim are they planning to achieve through acquisition. They should also consider what financial benefits
Background:
Business acquisition is one of the most vital tools to expand an existing business effectively. An acquisition takes place when an existing company buys another company which has more or less similar operating activities and ended up controlling it. It is clearly different from merger which is the integration of a business with another and sharing the control of the combined businesses collectively. Mergers and acquisitions (M&As) have long been considered as an one of the most highly appreciated method to achieve the desired growth rate and satisfying the key stakeholders. With rapid advances in science and technology competition for the same marker has increased significantly and to remain competitive in the market business organizations have considered M&As as an imperative strategic tool. Rising of new financing promises and changes in regulations have made M&As even more popular to create new market, maintain the existing market and acquiring unique technologies and intellectual properties. However, despite being considered as a pivotal business strategy to achieve target growth the general consensus is that more than eighty percent of the M&A fail to reach the desired financial goal (Nahavandi and Malekzadeh 1993) and fifty percent simply become unsuccessful (Cartwright and Cooper 1995; Child et al. 2001, Sally Riad. 2007). Although M&As have a high failure rate as suggested by previous results careful planning practices can increase the chance of their success. Although there is no rule of thumb that suits all situations in order to make a successful acquisition one must follow a few basic rules. Any purchaser no matter how the size of the company is must first determiw what strategic aim are they planning to achieve through acquisition. They should also consider what financial benefits