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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Here is a short guide to knowing the different acquisition possibilities and strategies that business leaders can select from

Before diving into the ins and outs of acquisition strategies, the 1st thing to do is have a firm understanding on what an acquisition truly is. Not to be mixed-up with a merger, an acquisition is when one business purchases either the majority, or all of another firm's shares to gain control of that business. Generally-speaking, there are approximately 3 types of acquisitions that are most common in the business industry, as business people like Robert F. Smith would likely understand. One of the most frequent types of acquisition strategies in business is known as a horizontal acquisition. So, what does this imply? Basically, a horizontal acquisition entails one company acquiring another firm that is in the same market and is performing at a similar level. Both companies are generally part of the same market and are on a level playing field, whether that's in manufacturing, finance and business, or farming etc. Frequently, they may even be considered 'rivals' with one another. Generally, the major advantage of a horizontal acquisition is the increased capacity of raising a company's client base and market share, along with opening-up the possibility to help a company grow its reach into brand-new markets.

Many people assume that the acquisition process steps are constantly the same, whatever the company is. Nevertheless, this is a normal misunderstanding due to the fact that there are actually over 3 types of acquisitions in business, all of which come with their very own operations and strategies. As business people like Arvid Trolle would likely validate, one of the most frequently-seen acquisition methods is known as a vertical acquisition. Basically, this acquisition is the polar opposite of a horizontal acquisition; it is where one firm acquires another company that is in an entirely different position on the supply chain. For instance, the acquirer company might be higher up on the supply chain but opt to acquire a firm that is involved in a key part of their business functions. On the whole, the beauty of vertical acquisitions is that they can bring in new earnings streams for the businesses, along with decrease prices of production and streamline operations.

Amongst the several types of acquisition strategies, there are 2 that individuals have a tendency to confuse with each other, possibly because of the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are 2 rather separate strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target company are in entirely unrelated industries or engaged in separate activities. There have been numerous successful acquisition examples in business that have included two starkly different firms with no overlapping operations. Normally, the goal of this approach is diversification. As an example, in a scenario where one services or product is struggling in the current market, companies that also have a diverse range of additional product or services often tend to be more stable. On the other hand, a congeneric acquisition is when the acquiring company and the acquired company are part of a similar market and sell to the same type of customer but have slightly different services or products. One of the main reasons why companies might decide to do this kind of acquisition is to simply expand its product lines, as business individuals like Marc Rowan would likely confirm.