Cisco's growth strategy is based on identifying and driving market transitions. Corporate Development focuses on acquisitions that help Cisco capture these. Acquisitions are often made as part of a company's growth strategy when it is more beneficial to take over an existing firm's operations than it is to expanding on. Swish, a cleaning products company in Peterborough, Ontario, has embarked on an ambitious growth strategy that includes acquisitions. In , Mahoney was.
Corporate acquisition strategy Video
Developing a Successful Acquisition Strategy: Positioning Your Business for Growth Ever since the financial crisis of , when many lenders were badly burned by toxic debt , raising money to acquire a target company has become more difficult. The Business Valuation Guide 5. This makes it easier for the investor to do its due diligence and execute the takeover with confidence; it also helps prevent unwanted surprises from being unveiled after the acquisition is complete. Tax free acquisitions Acquisition payment methods. For example, News Corp. Nokia acquired Symbian Limited to gain access to platforms for its mobile devices; inBev acquired Anheuser-Busch to penetrate new markets, creating the world's largest brewer; and, AOL acquired TechCrunch, the news blog, as part of a push to build a vast content reservoir and bring in advertising dollars. The Art of the Initial Management Meeting 8. The Snapple buyout, done by the well-known financial buyer Thomas H. If EPS is lower following an acquisition, it is considered dilutive. The use of an acquisition strategy can keep a management team from buying businesses for which there is no clear path to achieving a profitable outcome. As industries mature, they typically develop excess capacity. This type of business needs to first attain the appropriate sales volume to achieve the lowest-cost position, which may call for a number of acquisitions. Reducing excess in an industry can also extend to less tangible forms of capacity. This approach involves offering a baseline or mid-range product that sells in large volumes, and for which the company can use best production practices to drive down the cost of manufacturing. When mergers involve large numbers of new employees, a new business command structure needs to be designed, articulated and executed. Other successful acquirers keep acquired businesses separate from other operating units, even if that policy precludes exploitation of potential synergies. It may evaluate its own ability to launch a product within the time during which the window will be open, and conclude that it is not capable of doing so. In order to create any value, the acquirer needs to consolidate the administration, product lines, and branding of the various acquirees, which can be quite a chore.