Examining the examples of acquisitions that did well

Examining the examples of acquisitions that did well

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Listed below are a couple of business strategies relating to acquisitions

Before diving right into the ins and outs of acquisition strategies, the very first thing to do is have a solid understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one firm purchases either the majority, or all of another firm's shares to gain control of that business. Generally-speaking, there are around 3 types of acquisitions that are most common in the business sector, as business individuals like Robert F. Smith would likely understand. One of the most common types of acquisition strategies in business is called a horizontal acquisition. So, what does this indicate? Essentially, a horizontal acquisition involves one company acquiring a different business that is in the same market and is performing at a similar level. Both firms are basically part of the very same market and are on an equal playing field, whether that's in manufacturing, financing and business, or agriculture etc. Frequently, they could even be considered 'rivals' with one another. Overall, the major advantage of a horizontal acquisition is the increased potential of raising a business's customer base and market share, along with opening-up the chance to help a company expand its reach into brand-new markets.

Amongst the countless types of acquisition strategies, there are two that people commonly tend to confuse with each other, maybe due to the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are two very distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target company are in entirely unassociated sectors or engaged in separate activities. There have actually been many successful acquisition examples in business that have included two starkly different firms without any overlapping operations. Normally, the aim of this approach is diversification. For example, in a scenario where one service or product is struggling in the current market, companies that also possess a diverse range of additional products and services have a tendency to be more steady. On the other hand, a congeneric acquisition is when the acquiring company and the acquired business belong to a similar market and sell to the same type of client but have relatively different services or products. Among the main reasons why businesses could decide to do this type of acquisition is to simply expand its product lines, as business individuals like Marc Rowan would likely confirm.

Many individuals assume that the acquisition process steps are constantly the same, whatever the company is. Nevertheless, this is a common misunderstanding due to the fact that there are actually over 3 types of acquisitions in business, all of which come with their own operations and approaches. As business people like Arvid Trolle would likely verify, among the most frequently-seen acquisition strategies is known as a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one firm acquires another company that is in a completely different place on the supply chain. As an example, the acquirer company may be higher on the supply chain but opt to acquire a company that is involved in a crucial part of their business operations. In general, the appeal of vertical acquisitions is that they can generate new income streams for the businesses, in addition to decrease prices of manufacturing and streamline operations.