Strategies used in acquisition are vey important because they help the acquiring company to make maximum benefit out the acquisition deal. Before entering into any acquisition deal it is important for the company to consider its resources, future market opportunities and its targeted consumers and their reactions (Roy 2004).
In this paper we explore two companies which have been involved in acquisition and how it has strengthened their resources and competitive advantage in the market. The companies explored are Adidas in footwear industry and Hp in computer industry.
In 1970s Adidas; a sports company based in Germany was leading in market in the United States of America because of innovations in its products. Through aggressive marketing Nike became the leader in market which triggered the merge of Adidas and Reebok in 2005.
Adidas expressed its desire to acquire all Reebok’s outstanding shares (Antal-Mokos 2009). These two companies have managed to pull together their resources to create new sporting products and also to explore new markets especially North America. The merge raised the value of the two companies to $12 million (Antal-Mokos 2009).
Adidas- Reebok merger has also maintained sustainable competition ability by merging their different competencies. Adidas is a well known strong brand with high performance. On the other hand Reebok has a great conscience for fashion which makes it preferred brand by urban purchasers’.
By acquiring Reebok, Adidas takes advantage of the two ideas without compromising the image of the two brands (Antal-Mokos 2009). The merger allows Adidas to venture into lifestyle market. Adidas also has managed to improve its competitive advantage by involving the youth through music and sports. Combining Reebok’s lifestyle shoe brand with high performance and technology Adidas brand creates a main attraction to youths thus keeping a sustainable competitive advantage in the market.
In order to keep up its competition with other brands, Adidas will boost distribution of its brand in North America where Reebok dominates thus venturing into new market (Antal-Mokos 2009).This idea increased its sales in North America hence remaining at the top of competition. Adidas and Reebok are well known brand names hence their good reputation has helped in building a firm competition base.
Hp has benefited a lot from its merge with Compaq in 2004. It has strengthened its human resources by involving the Compaq’s human resource. Merging these two great work force ensures that the company meets its objectives. The company has over 150,000 in more than 170 countries which makes its consumer base strong (Roy 2004). This has led to increased revenues for the company due to its venture into new markets.
Acquisition has helped Hp to be the leader in computer industry through diversity. Considering both Hp and Compaq are strong brands, they produce wide range of products, both computer hardware and software. This ensures that all customer needs are met hence making its products the desired choice compared to its competitors.
This has enabled Hp to acquire a sustainable competitive advantage (Roy 2004). Another idea that enhances its competitive advantage is Hp brings professionals from different parts of the world together, which in turn improves the creativity and innovative power of the company.
As a result new, improved and reliable computer products are generated. A strong employee base ensures that there are Hp professionals in geographical locations hence improving its customer care.Combination of factors such as customer satisfaction, innovation, creativity, products reliability and services ensure Hp’s enhanced competitive ability (Roy 2004).
In conclusion, we realize that acquisition can be a revival tool to the companies operating at loses. In his paper we have seen how acquisition boosts the revenues of companies as well as their ability to compete with others.
References
Antal-Mokos, Z. (2009). Managing Mergers and Acquisitions. The global business handbook: the eight dimensions of international management, 123.
Roy, P. & Roy, P. (2004). The Hewlett Packard-Compaq computers merger: Insight from the resource-based view and the dynamic capabilities perspective. Journal of American Academy of Business, 5 1, 7-14.