Merger, Acquisition, and International Strategies Assignment Instructions
Choose two (2) public corporations in an industry with which you are familiar – one (1) that has acquired another company and operates internationally and one (1) that does not have a history of mergers and acquisitions and operates solely within the U.S. Research each company on its own Website, the public filings on the Securities and Exchange Commission EDGAR database (http://www.sec.gov/edgar.shtml), in the University’s online databases, and any other sources you can find. The annual report will often provide insights that can help address some of these questions.
Write a six to eight (6-8) page paper in which you:
- For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.
- For the corporation that has not been involved in any mergers or acquisitions, identify one (1) company that would be a profitable candidate for the corporation to acquire or merge with and explain why this company would be a profitable target.
- For the corporation that operates internationally, briefly evaluate its international business-level strategy and international corporate-level strategy and make recommendations for improvement.
- For the corporation that does not operate internationally, propose one business-level strategy and one corporate-level strategy that you would suggest the corporation consider. Justify your proposals.
- Use at least three (3) quality references. Note: Wikipedia and other Websites do not quality as academic resources.
AT&T Merge With T-Mobile
For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.
In 2011, AT&T merged with T-Mobile making it become the largest wireless telecommunications company in the U.S. The merger enabled it to overcome Verizon Wireless are the largest wireless carrier in the U.S. The acquisition was beneficial to T-Mobile as it helped in reducing the debts of the company. The acquisition also enabled AT&T to increase its mobile the size its network and coverage. This enabled AT&T to increase its competitiveness in the wireless network increase. It also enabled the company to focus on the development of new applications and devices which were necessary in improving its competitiveness.
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Prior to the acquisition, T-Mobile was facing various financial woes. The company had experienced a significant reduction in the value of its stock. The merger helped in preventing the continued loss in the value of stock. The merger was greatly beneficial to both companies. T-Mobile traditionally focused on the provision of basic services to its customers. These included texting, voice calls, and various other plans that helped in improving the competitiveness of the company. However, the company failed to upgrade its internet network, which reduced its competitiveness in the industry. Despite the limitation, T-Mobile used to perform greatly in the basic services. However, the arrival of wireless data made the company lose its competitiveness. This is because most customers wanted the company to provide high technology, which would enable them to use new devices that would only be supported by high technology. They also wanted affordable data plans. However, the company did not upgrade its internet network to satisfy the needs of its customers.
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When T-Mobile realized the changes in the market and how they were affecting them through loss of business, they strived to venture into the business. However, the company had already experienced irreparable damage. Their major rivals such as Verizon Wireless, Sprint, and AT&T were already offering new technology and had already had a highly advanced wireless internet data. T-Mobile started focusing on the provision of wireless internet data and new technologies to win back customers. This change in strategic focus enabled the company to gain back some customers. Since they could not compete with the 3G network, which their rivals offered, they introduced the 4G network. In fact, they were the first company to introduce the 4G network in the U.S. However, other companies soon introduced the 4G network making them lose business to them again. They were unable to cope with competition in the industry since the telecommunications industry changes rapidly. Customers prefer companies that offer them the latest technology and offer regular upgrades of data plans and devices ((Hitt, Ireland, & Hoskisson, 2013).
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The merger was highly beneficial to AT&T. It enabled them to become the largest wireless company in the U.S. Despite the fact that T-Mobile was one o the major rivals of AT&T, the merger provided AT&T with a great opportunity to improve its competitiveness in the industry. The merger enabled AT&T to improve its services in comparison to their competitors. AT&T offered cheaper data plans. The company did not also offer a contract plan, which made it be popular among customers. AT&T also offered the best unlimited data plan at the lowest cost in the market. Therefore, the merger enabled AT&T to improve its available services, which made it become the leader in the industry.
Company that has not been involved in any merger or acquisition
Publix Super Markets, Inc. is one of the leading companies in the retail food industry. The company has various retail food supermarkets located in several states. The company has outlets in Tennessee, Georgia, Florida, Alabama, and South Carolina. Some of the products that the company sells include dairy products, meat, seafood, deli, beauty care products, and pharmaceutical products. Publix Super Markets offers several lines of private label brands and unbranded merchandise to its customers. The company receives its products from its distribution centers and various suppliers.
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The merger between Publix Super Markets and Bi-Lo Supermarket would be greatly beneficial to both companies. This is because both companies compete in the same industry. In addition, the merger would enable the companies’ customers to benefit from the discounts and coupons offered by the companies. The merger or acquisition would enable both companies to improve their relationship with customers. It would enable both companies to provide high quality services, which would improve the level of customer satisfaction. Acquisition is very common in the food industry. Various companies have successfully used this strategy to improve their sales revenue and growth. Merger or acquisition would enable both companies to improve their competitiveness (Hitt, Ireland, & Hoskisson, 2013).
For the corporation that operates internationally, briefly evaluate its international business-level strategy and international corporate-level strategy and make recommendations for improvement.
Having an international business-level strategy enables an organization to use its resources and capabilities and implement the strategy in the home countries and other countries that the organization has operations. Apple is one of the most globally respected brand names. The company pursues a business- level strategy of making the best products that suit the needs of their customers. Despite the fact that the company sells its products to all parts of the world, it used China as the main location n the manufacture of the products. Using China as the hub of its manufacturing operations enables the company to reduce its operational costs. This is due to the low labor costs in China (Rothaermel, 2012).
Apple strives to improve its products regularly. It strives to develop innovative products that would be popular among its customers. In fact, Apple has produced various revolutionary products. These include the iPod, iPhone, iTunes, and iPad. The iPhone is one of the most successful products of the company. Apple keeps upgrading the iPhone. The iPhone 6 is the latest version of the iPhone. Manufacturing high quality products enables Apple to charge a slightly higher price that other products in the market. Customers are willing to pay a premium to access the company’s products due to their higher quality. During the launch of a new product customers may line up for days at the company’s shops, which are located in various parts of the world , to simply be among the first people to own the products. The U.S., Europe, and Asia are the major markets of Apple (Rothaermel, 2012).
Apple has several competitors in the industry. Samsung is one of the major competitors of the company. However, Apple has a unique position that enables it to be a market leader in the industry. Apple target market is people who love to use their products due to the superior technological features and design of the products. The products usually incorporate the latest technologies. However, the high price of the products prevents Apple from venturing into the emerging markets more effectively. The company should offer low priced products to venture into these markets effectively.
The international corporate-level strategy of an organization refers to the scope of the operations of the organization and the measures that geographical diversification has on the organization. The corporate-level strategy of Apple is to sell their products to developed countries and use third world countries in the manufacture of the products. Using third world countries in the manufacture of the products enables the company to benefit from low labor costs in the countries. The company strives to ensure that the products meet the needs of the customers. Therefore, they incorporate the latest technologies in the products. This enables them to charge high prices for the products. In addition, it enables the company to maintain its image, which enables them to retain their popularity in the market. Customers can purchase the company’s products through different avenues. They may purchase the products online or from Apple Stores located in various parts of the world. This gives Apple a competitive edge over their rivals.
Apple can improve its international business-level strategy by offering their customers free applications. Currently, the company charges a fee to use various applications. This increases the burden on customers as they have to purchase expensive Apple devices and pay an additional fee to use applications that support the devices. Offering free applications would prevent customers from migrating to Apple’s rivals, which would greatly reduce Apple’s competitiveness.
For the corporation that does not operate internationally, propose one business-level strategy and one corporate-level strategy that you would suggest the corporation consider. Justify your proposals.
South West Airlines is one of the most popular airlines. The company has been operational for more than 40 years. It strives to differentiate itself from its rivals by offering low fares and providing high quality customer service. South West Airlines has grown from humble beginnings to become the largest domestic carrier in the U.S. in terms of the number of passengers.
The international business strategy of South West should be to expand to international locations. The company can expand its operations to other parts of North America and South America. The company may use the 2016 Brazil Olympics to expand into the South American market. The company may create routes originating from various U.S. cities to Brazil. This would help in improving the profitability of the company.
South West has the capability of competing with major airlines in the U.S. The company has successfully improved its competitiveness by offering flights from different locations at a low cost. However, expanding the business strategy of the company would be very expensive. To compete effectively with other major airlines in the U.S., South West should use a different strategy. Offering cheaper fares and improvement in the quality of its services would enable the company to compete with the major airlines effectively. Most of the major airlines charge higher fares. In addition, they offer low quality services. However, offering low fares may have a negative impact on South West. It would reduce the profit margin of the company, which may reduce its competitiveness (David, 2011)
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