Throughout the last decades, mergers and acquisitions (M&A) are achieving increasing importance in the corporate world. There are many motives such as to increase the market power and competitive advantage, to reduce dependence on suppliers, to gain fast access to new market etc. why managers adopting an acquisitions strategy. Nevertheless, many M&As have been unsuccessful in the past due to incompetent managers, poor ethics, inadequate analysis prior the deal, and diversification away from the core business of the company. Therefore, a careful industry, target company, and product portfolio analysis must be made before the deal. The literature provides different frameworks and analytical tools that can be used in the M&A process in order to avoid typical risks. However, because of the uniqueness of each M&A deal, it is important to gain further insights in these transactions in order to provide an appropriate guideline on how to select an optimal M&A target.
Table of Contents
1 Introduction
2 Literature Review
3 Research question
4 Research objectives
5 Philosophy Research Design
5.1 Epistemology
5.2 Ontology
6 Research Approach
6.1 Quantitative vs. Qualitative
6.2 Data collection
6.2.1 Sample size
6.2.2 Collecting data
6.2.3 Data analysis
7 Ethical considerations
8 Conclusion
Research Objectives and Themes
The primary goal of this research is to explore Mergers and Acquisitions (M&A) as a corporate strategy, focusing on how companies can effectively select optimal targets while managing the inherent risks and complexities associated with these transactions.
- Theoretical analysis of M&A motives and strategic frameworks.
- Methodological design for qualitative research in business management.
- Identification of risk factors and success criteria in acquisitions.
- Strategic alignment and competitive advantage through M&A.
Excerpt from the Book
Literature Review
According to Porter (1998), competition determines the success or failure of companies. In addition, he outlines that a corporate strategy is the search for a favourable competitive position in an industry, the fundamental arena in which competition occurs. Furthermore, he argues that the purpose of strategy is to establish a profitable and sustainable position against the forces that determine industry competition. In his framework, Porter´s five forces model of industry competition he describes five forces-threat of new entrants, bargaining power of supplier, bargaining power of customer, rivalry among current competitors, and threat of substitute products and services-in detail, which must be analysed to formulate a strategy successfully. The strength of each of the five competitive forces is a function of the industry structure or the underlying economic and technical characteristic of an industry (De wit & Meyer, 2004).
Although this framework has been widely accepted in literature as one of the most pervasive analytical tool, there has been some criticisms in the past. Henry (2008) argues that Porter´s framework is a static analysis which assumes relatively stable markets. In this context, he outlines that it does not provide enough information about how players in the industry interact wit each other and criticize that it represents a traditional view of strategy, which is no longer applicable in today´s rapidly changing environment. Prahalad (2000) supports Henry´s view by arguing that today companies are facing significant and discontinuous change in the competitive environment such as the impact of the internet on the way in which companies conduct their business.
Summary of Chapters
1 Introduction: This chapter introduces the growing importance of Mergers and Acquisitions in the corporate world and highlights the necessity of thorough analysis before deal execution.
2 Literature Review: This section examines existing theories on industry competition, strategic frameworks like Porter’s five forces, and various motives for M&A activities.
3 Research question: Defines the core problem of the study, specifically focusing on the selection of optimal M&A targets.
4 Research objectives: Outlines the specific goals, including understanding how M&A creates value and how to mitigate associated risks.
5 Philosophy Research Design: Discusses the epistemological and ontological underpinnings, justifying the choice of an interpretivist approach.
6 Research Approach: Compares deductive and inductive research methods, establishing a preference for qualitative data collection to accommodate the complexity of M&A.
7 Ethical considerations: Addresses the critical nature of research ethics, including informed consent and the responsible handling of data collected from participants.
8 Conclusion: Summarizes the research findings, reinforcing the importance of rigorous planning and analytical frameworks in successful M&A transactions.
Keywords
Mergers and Acquisitions, M&A, Corporate Strategy, Porter's Five Forces, Qualitative Research, Interpretivism, Strategic Management, Competitive Advantage, Data Collection, Synergy, Risk Management, Business Research, Target Selection, Market Power, Business Strategy.
Frequently Asked Questions
What is the core focus of this research paper?
The paper focuses on the strategic implementation of Mergers and Acquisitions (M&A), specifically investigating how companies can identify and select optimal targets to achieve competitive advantage.
Which primary themes are addressed in this study?
Central themes include the evaluation of M&A motives, the application of strategic analytical frameworks like Porter's five forces, and the methodology required for conducting qualitative research in a business context.
What is the central research question?
The research is driven by the overarching question: "How to select an optimal M & A target?"
Which scientific methodology is applied?
The research utilizes an interpretivist philosophical stance combined with an inductive, qualitative methodological approach, primarily relying on semi-structured interviews for data collection.
What topics are covered in the main body of the text?
The main body covers literature reviews on corporate strategy, research design philosophies, data collection methods such as sampling and interviewing, and the importance of ethical considerations in qualitative research.
How would you characterize this work using keywords?
The work is characterized by terms such as M&A, corporate strategy, synergy, competitive advantage, qualitative research, and strategic management.
Why does the author prefer an interpretivist research philosophy?
The author argues that M&A deals are unique and subjective, making them unsuitable for natural science-based generalization; therefore, a subjective, interpretivist approach is necessary to capture the complexity of these transactions.
How is the interview process structured in this study?
The study uses semi-structured interviews with industry experts, primarily from an international M&A consultancy, to gather deep insights and avoid the limitations of standardized quantitative approaches.
- Quote paper
- Alexander Berger (Author), 2011, Applied Research Methods - Mergers and acquisitions (M&A), Munich, GRIN Verlag, https://www.grin.com/document/174855
