A few successful acquisition examples to motivate CEOs

A few successful acquisition examples to motivate CEOs

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Here is a short overview to knowing the various acquisition options and strategies that business leaders can choose from

Among the several types of acquisition strategies, there are two that people have a tendency to confuse with each other, perhaps due to the similar-sounding names. These are known as 'conglomerate' and 'congeneric' acquisitions, which are 2 really distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target company are in completely unrelated sectors or engaged in different endeavors. There have been many successful acquisition examples in business that have included 2 starkly different firms with no overlapping operations. Usually, the purpose of this approach is diversification. For instance, in a circumstance where one services or product is struggling in the current market, companies that also possess a diverse variety of other products and services often tend to be a lot more steady. On the other hand, a congeneric acquisition is when the acquiring company and the acquired firm belong to a similar industry and sell to the same sort of client but have slightly different products or services. Among the primary reasons why companies could choose to do this kind of acquisition is to simply increase its line of product, as business people like Marc Rowan would likely confirm.

Before diving right into the ins and outs of acquisition strategies, the initial thing to do is have a firm understanding on what an acquisition truly is. Not to be confused with a merger, an acquisition is when one firm purchases either the majority, or all of another business's shares to gain control of that company. Generally-speaking, there are approximately 3 types of acquisitions that are most typical in the business world, as business individuals like Robert F. Smith would likely know. Among the most frequent types of acquisition strategies in business is known as a horizontal acquisition. So, what does this suggest? Essentially, a horizontal acquisition entails one company acquiring an additional company that is in the exact same market and is performing at a similar level. Both companies are generally part of the same sector and are on an equal playing field, whether that's in production, finance and business, or farming etc. Frequently, they could even be considered 'competitors' with each other. In general, the major advantage of a horizontal acquisition is the increased possibility of enhancing a firm's customer base and market share, along with opening-up the opportunity to help a firm broaden its reach into brand-new markets.

Many people presume that the acquisition process steps are always the same, whatever the company is. Nevertheless, this is a common mistaken belief due to the fact that there are actually over 3 types of acquisitions in business, all of which include their very own procedures and strategies. As business individuals like Arvid Trolle would likely confirm, among 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 a totally different place on the supply chain. For example, the acquirer business might be higher up on the supply chain but decide to acquire a firm that is involved in a key part of their business procedures. On the whole, the beauty of vertical acquisitions is that they can bring in brand-new revenue streams for the businesses, as well as decrease prices of production and streamline operations.