This term paper evaluates acquisition as a mode of entry used by Vodafone, regarding the variables that affected the entry mode decision when taking over the competitor Mannesmann. In particular, the analysis of the variables shall lead to a clear conclusion why an acquisition was used in this case in order to enter the target market. Another question that will be answered in this term paper is whether Vodafone entered the market efficiently, given the circumstances.
For this purpose, the term of market entry mode is defined first of all. Then, an overview of the different market entry modes is provided in order to highlight the differences between them. After that, the variables affecting the entry mode decision are named and explained. Then the takeover process of the business case is described in a chronological order. In the next part the variables influencing the decision to use an acquisition as a mode of entry within the example are analyzed in order to evaluate the bid Vodafone submitted. Then the bid made by Vodafone will be evaluated on a basis of the available economic data. As a result the key factors are summarized.
In the last two decades globalization has become one of the most important topics in the world of business. More and more companies try to escape their home markets and enter into international markets to expand their businesses. As a consequence the question of the choice of foreign market entry mode gets more important, because it is linked to the success of the activities of a company in a target market.
One of these companies seeking to escape the home market was Vodafone in 1999 when it started a hostile takeover in order to bid for its competitor Mannesmann. In the end this strategic move went down in history as the biggest M&A-transaction ever performed in terms of the transaction volume in the world of business. Later the question arose whether the deal was a good strategic move or an excessive and costly bid within the growth-strategy which Vodafone follows at all costs.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Market entry modes
- Definition
- Overview of market entry modes
- Factors affecting entry mode decision
- Basics
- External variables
- Internal variables
- The acquisition of Mannesmann by Vodafone
- The Story
- Analyzing the factors affecting the entry mode decision
- External variables
- Internal variables
- Evaluation of the economic efficiency of the bid
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This term paper aims to evaluate the acquisition of Mannesmann by Vodafone as a mode of entry, analyzing the factors influencing this decision and assessing its economic efficiency. The paper seeks to determine why Vodafone opted for an acquisition as an entry mode and whether this was an efficient market entry strategy under the given circumstances.
- Definition and overview of market entry modes
- Analysis of factors impacting the entry mode decision
- Case study of the acquisition of Mannesmann by Vodafone
- Evaluation of the economic efficiency of the acquisition
- Identification of key factors influencing the entry mode choice
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter provides a general overview of globalization and its impact on business expansion. It introduces the case of Vodafone's acquisition of Mannesmann, highlighting its significance as a major M&A transaction. The chapter outlines the objectives and key themes of the paper, focusing on the analysis of the acquisition as an entry mode and its economic efficiency.
- Market entry modes: This chapter defines the concept of a foreign market entry mode, emphasizing its importance in international business. It presents an overview of different entry modes, highlighting their key characteristics and classification based on resource commitment, risk exposure, control, and profit return. The chapter also notes the influence of industry-specific and country-specific factors on the choice of entry mode.
- The acquisition of Mannesmann by Vodafone: This chapter details the process of Vodafone's acquisition of Mannesmann, providing a chronological account of the events. It examines the factors influencing the decision to use an acquisition as an entry mode, specifically analyzing both external and internal variables. The chapter concludes by evaluating the bid made by Vodafone based on available economic data.
Schlüsselwörter (Keywords)
The key concepts and topics explored in this paper include market entry modes, foreign market entry, acquisition, mergers and acquisitions (M&A), strategic decision-making, economic efficiency, globalization, international business, and the case study of Vodafone's acquisition of Mannesmann.
- Quote paper
- Anonym (Author), 2015, M&A as a mode of entry into the german market. The acquisition of Mannesmann by Vodafone, Munich, GRIN Verlag, https://www.grin.com/document/320275
