In the open economy, the major business processes like Mergers, Acquisition or Business takeover have taken a significant place to keep the economy alive, growing and promising. It has been well established that merger and acquisition can bring notable improvement, and found beneficial for enterprises depending on the way how effectively the process is undertaken and new strategies adopted in the model. Why mergers or Acquisitions are important? What grounds make business entrepreneurs inspire to enter into merger or go for takeovers?
Simply put, a company is extremely skilled in marketing strategies and financial strength while another company has proved its ability in administration, organization and operations. When it comes to the strength and weakness factors, you can understand that both the companies are having strength in some areas as well as weakness factors. As administration and operation is important, so it applies to marketing or finance, and based on all these inputs, a company can thrive in the competitive world. Therefore, if both the above companies come under one platform and get amalgamated, it can start flourishing. The process gives birth to a new company which has high potential to perform significantly superior and higher, then what they can do individually.
Going by the vision of one of the major corporate merger and acquisition expertsRobert Stefanowski, that there are several reasons which mergers or acquisitions take place. These include
Accessing Funds and Assets
Higher production is backed by state-of-the-art operational unit, organized distribution channel often found less expensive than building or introducing a new facility. The companies have huge unused resources but weak in marketing or are bankrupted can look for business partner for their sustainability and development. For business buyers, companies with global recognition and brand image but in the way insolvency can be rewarding acquisitions.
Obtaining quality human resource
Through merger and acquisition, companies can obtain high quality staff that are skilled and having knowledge in the area you’re specializing in. As for example, acquisition of a business operating with efficient management, skilled labor, process systems and business intelligence for a potential business buyer can be extremely productive and money spinning.
In competitive business world, if you cannot keep required pace with the changing world in terms of technological changes, concepts and business ideas, your business can be under-performing. Therefore, despite struggling for existence, one can think of getting merged with a potential buyer or buy a profit making ready business that offers immediate expansion
According to Robert Stefanowski,acquisition or business takeover is a matchless solution for any business house intended to diversify its business area. Your target business must be in position to offer you quality products or services which you can market with your brand name or its own brand through your vast distribution channel. Thousands of high profile business enterprises nowadays go for business takeovers that offer them the grand opportunity to get diversified
Buying up rival companies with assets and products or services can be a great way to come out of competition. With this, you can make supremacy in the global market without taking the hazard of developing a net setup by yourself.