A number of successful acquisition examples to inspire chief executive officers

A number of successful acquisition examples to inspire chief executive officers

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Listed below are some business approaches relating to acquisitions

Many individuals presume that the acquisition process steps are constantly the same, no matter what the business is. Nonetheless, this is a frequent misconception since there are actually over 3 types of acquisitions in business, all of which feature their very own procedures and strategies. As business people like Arvid Trolle would likely validate, among the most frequently-seen acquisition strategies is referred to as a vertical acquisition. Basically, this acquisition is the polar opposite of a horizontal acquisition; it is where one firm acquires another firm that is in a completely different position on the supply chain. For instance, the acquirer firm might be higher on the supply chain but decide to acquire a business that is involved in a key part of their business procedures. On the whole, the appeal of vertical acquisitions is that they can bring in new revenue streams for the businesses, as well as decrease costs of production and streamline operations.

Among the many types of acquisition strategies, there are 2 that individuals have a tendency to confuse with each other, probably due to the similar-sounding names. These are referred to as 'conglomerate' and 'congeneric' acquisitions, which are 2 very distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in completely unassociated sectors or engaged in separate endeavors. There have actually been many successful acquisition examples in business that have involved 2 starkly different businesses with no overlapping operations. Normally, the purpose of this strategy is diversification. For instance, in a scenario where one product or service is struggling in the current market, firms that also possess a diverse variety of other services and products often tend to be more stable. On the other hand, a congeneric acquisition is when the acquiring business and the acquired firm belong to a similar industry and sell to the same kind of consumer but have slightly different services or products. Among the major reasons why companies may choose to do this sort of acquisition is to simply increase its product lines, as business people like Marc Rowan would likely confirm.

Prior to diving right into the ins and outs of acquisition strategies, the first thing to do is have a firm understanding on what an acquisition actually is. Not to be confused with a merger, an acquisition is when one business purchases either the majority, or all of another business's shares to gain control of that firm. Generally-speaking, there are approximately 3 types of acquisitions that are most popular in the business world, as business people like Robert F. Smith would likely know. One of the most frequent types of acquisition strategies in business is referred to as a horizontal acquisition. So, what does this indicate? Basically, a horizontal acquisition entails one company acquiring a different firm that is in the same market and is performing at a similar level. The two companies are basically part of the same industry and are on an equal playing field, whether that's in manufacturing, finance and business, or agriculture etc. Frequently, they might even be considered 'competitors' with one another. In general, the main advantage of a horizontal acquisition is the increased potential of enhancing a company's customer base and market share, as well as opening-up the opportunity to help a company expand its reach into new markets.