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Merger and Acquisition

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You are part of a company who has made the strategic decision to acquire another company. There are two possible implementation strategies for this decision:

A. Merge the acquired company into your company. The result of this strategy will be one company containing the elements of both companies.

1. What are the pros and cons of this implementation strategy?

2. How will you know if the strategy is working?

B. Operate the acquired company as a separate business entity. The result of this strategy will be two separate companies under one senior management ââ?¬Å"umbrellaââ?¬Â? (the senior management team that is responsible for running both companies).

1. What are the pros and cons of this implementation strategy?

2. How will you know if the strategy is working?

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Solution Summary

You are part of a company who has made the strategic decision to acquire another company. There are two possible implementation strategies for this decision:

A. Merge the acquired company into your company. The result of this strategy will be one company containing the elements of both companies.

1. What are the pros and cons of this implementation strategy?

2. How will you know if the strategy is working?

Solution Preview

A.

The major benefit of this implementation strategy is that it will allow the merged entity to benefit from economies of scale and synergies arising due to the merger of two independent entities. The major disadvantage of this strategy is that the merger may become a failure if the employees from the two companies are unable to work in close cooperation with each other due to differences in culture, working ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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