When it comes to the huge business process of merger and acquisition, strategy building and techniques followed should be extremely insightful since both business endeavors influence the profitability and development of a business enterprise. The biggest advantage of company mergers and acquisitions is its abrupt change which can exceed any other developmental strategic mechanisms if the procedure is undergone effectively. A number of exemplifying acquisitions and business merger endeavors has shown how dramatically and quickly they can bring change in organizational growth.
The major advantages that you can derive out of merger or acquisition process are
• Help enhance market accessibility even in the overseas;
• Help achieving leading position in the competitive market;
• Diversification of business activities and addition of new product lineups;
• Enhance brand image that satisfies all business stakeholders, business associates or affiliates;
• Widen scope and eliminate barriers that invite international partners;
• Enhance business capability with solid asset background and financial status;
Major Takeover Strategies
• A business acquisition endeavor begins with evaluation process whereas the acquiring company is required to identify the growth opportunities and market potential of that particular products or services. In order to determine the possible market growth, leaders involved in acquisition should gather comprehensive data and undergo necessary market surveys. Mostly the entire process is kept top secret while various database are collected that help discover the potentiality of the company to be acquired;
• The possible benefit out of the acquisition project must be explicable and unambiguous. For this, from veteran business analysts to economists as well as advisors work in conjunction to spot the productive areas; and also, the risk matters involved in the takeover process. This should be defined based on the acquisition objectives and the analytical reports. Importantly, importance of this analysis is incredible because any loophole in assessment can lead to enormous business loss.
• The weakness of the proposed company is a major factor that helps an acquiring company undergoes a money making business takeover. The business trend establishes that difficulty in change management or adoption of newest market trend is a great cause of business collapse. Numbers of tremendously reputed companies become bankrupt because of mismanagement or ineffectively in taking up new challenges. For an acquiring company this is an immense scope that can be used as way of business acquisition strategy for better negotiation. Right from creditors, financial institutes, stakeholders to employees who scare about the circumstances, gladly accept the proposal of the acquiring company that help meet their own interest.
• In this phase, the acquiring company should sit with the management people, creditors as well as the company employees for necessary settlement of their debts or wages backlog etc. Thus, many takeover masters target to acquire distinguished companies once they found bankrupt and following the acquisition, it keeps the acquired company’s brand name unscratched. Once the offer of the acquiring company is accepted, before finalization of the deal, its management should undergo a final careful review about the yield of the procedure.
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