Merger, Acquisition, and International Strategies - Research Paper Example

? Merger, Acquisition, and International Strategies Merger, Acquisition, and International Strategies Question Marathon Oil Corporation is one of the largest refiners in the USA. It is an international company with operations in production and exploration of oil, natural gases and mining. It also extracts bitumen and upgrades it to vacuum gas and synthetic crude oil (Marathon Oil Corporation annual reports, 2008). Henry M Ernest founded Ohio Oil Company in 1887. Standard Oil Trust then obtained it. The company later split up with Standard Oil Trust and bought Transcontinental Oil Company. Transcontinental Oil Company was the owner of the Marathon brand. Ohio Oil Company transformed into Marathon Oil Company in 1960s, making it grow through purchasing or merging with other companies. Besides, the company has enjoyed good fortunes through drilling oil in regions outside the USA. Such regions include Mexico, Canada, Alaska and Ireland (United States Congress, 1981) United States Steel bought Marathon Oil in 1982 and moved its headquarters from Ohio to Texas. In 1998, Marathon Oil merged with Ashland Inc. and formed Marathon Ashland Petroleum LLC. This enabled Marathon Oil to expand its base in the USA. In 2001, USX sold the steel firm in Marathon Ashland Petroleum LLC and concentrated on oil business. The company was then named Marathon Oil Corporation (Donnell, 2007). The company has opened up drilling facilities in Louisiana, Illinois, Canton, Ohio, Michigan, Kentucky, Texas City, Catlettsburg, Texas, Minnesota, Angola, and Equatorial Guinea because of merging. The company also experiences good returns on its investment. For example, the latest financial statement for the company stated returns on investors appreciated by 9.8%, earning yields of 8%, revenue increase of 16 billion and profit margins of 9 billion. The company made a profit of 4 billion more compared to the previous year. Though the company had an increase of daily expenses from 166 million daily to 174 million, it experienced a daily income of 384 million. The main reason why the company has sustained good profits is its ability to conquer new markets and merge with other companies (Donnell, 2007). Question 2 CarMax, Inc was established in 1996. The company deals in second-hand cars through its subsidiaries. Last year the company sold over half a million cars. The company also sales some of its cars through auction; last year, the company sold thirty thousand cars at its on-site auction centers. At times, the company is allowed to sell new cars at four locations together with manufacturing companies. Last year, two percent of its cars sold were new cars. Apart from this, the company offers other products and services. They include purchasing of cars directly from consumers, guaranteed asset protection, accessories, and vehicle repair. The company acquires cars from consumers through car-buying centers and in-store appraisal process and sales them to other buyers or leases them out to hires or individuals who want to use them in racing or wedding parties (CarMax, 2013). It would be profitable if CarMax merged with Suzuki Motor Corporation. This is because Suzuki Motor Corporation operates worldwide. This would make CarMax expand its services to the international community and widen its market. Lastly, by going international, CarMax would improve its image as an international company. The company would also deal in a wide range of cars such as pickups and Nissan motorcycles. This would enable the company to outshine major rival companies such as General Motors (American Suzuki Motor Corporation, 2013). Question 3 Marathon Oil Corporation has a cost leadership system that improves level of efficiency and reduces costs of operation. Such system is able to convince countries to allow Marathon Oil Corporation to operate in their regions in a cost-effective mode. This has enabled the company to deliver goods and services to its clients at a relatively lower price compared to its rivals. The company has also differentiated its departments in order to specialize in various areas. There is a department dealing with exploration of oil in various countries while another department refines the drilled oil. The company also focuses on a particular market when delivering its goods. This has enabled the company to create a sense of loyalty among its customers. The company also uses modern technology and automation when drilling oil, refining oil and advertising its goods and services (Donnell, 2007). Automation and technology reduces assembly time and production costs. It also leads to mass drilling and production of oil products. Another advantage of automation production line is that it reduces the number of employees. For example, a single machine is capable of performing work done by ten or more people, reduce waste, and risk. As a result, the company saves on the expenses used to hire employees. The machines are not prone to malice, tiredness or ineffectiveness. Consequently, they produce goods of higher quality that attract more customers. This means the company can reduce operational costs and increase sales. At the end, the company realizes more returns and profits. The company has an International Corporate-Level Strategy that seeks to achieve both local responsiveness and local responsiveness. This has made the company to decentralize its services in order to be effective in delivery of goods and services (Donnell, 2007). However, the company faces various challenges in the international market, especially making the organization structure comply with the laws of host nations. The company is unable to manage human resource because of cultural differences and ethical issues that have to be tackled. Some foreign nations may dictate the kind of employees that the company should employee. These employees may not be competent enough to offer quality services. Cultural differences in terms of language and food consumed also pose challenges to the company. Furthermore, emissions of harmful gases such as Carbon (IV) Oxide and sulphide gases from the industry are responsible for global warming (Marathon Oil Corporation annual reports, 2008). The company has a number of traditions that help it foster efficiency and increase its returns to curb risks and challenges. The company’s culture includes educational programs for employees that help to develop high performing employees, improve their skills and introduce them to foreign culture. Secondly, the company is also involved in environmental protection programs around the world. This moral practice has endeared the company to various countries. As a result, the company is able to get exploration license easily (Marathon Oil Corporation annual reports, 2008). Question 4 In the event that CarMax merges with Suzuki Motor Corporation, it will function internationally. This would lead to a reduction in the operating cost, enlarge their markets and maximize their profits. In order for CarMax to function properly internationally, it must apply focused low cost as a level of business strategy (CarMax, 2013). The company must offer its services at a lower price and concentrate on a small segment of the market as it establishes itself internationally. The company should concentrate on major leasing companies or new nations such as South Sudan that requires plenty of good but affordable cars. This would enable the company to create loyal customers and expand its market. Lastly, the company should use a differentiation or an Integrated Low-Cost. This would enable the bank to adopt in a new environment and embrace changes. These changes could be in terms of new legislation, operational costs or change in culture. The strategy would enable the company to develop new skills and update its technological system beyond that of its competitors (American Suzuki Motor Corporation, 2013). References American Suzuki Motor Corporation (2013). Way of Life. Retrieved from http://www.suzukiauto.co.za/terms-and-conditions/ CarMax (2013). CarMax Services. Retrieved from http://www.linkedin.com/company/carmax/products> Donnell, J. C. (2007). The evolution of an international oil corporation: Marathon Oil Company. Marathon Oil Corp. Marathon Oil Corporation. (2008). Marathon Oil Corporation annual reports and 10-Ks. New York: Newcomen Society in North America. United States Congress (1981). Mobil Oil Corp: Joint hearings before the Committee on Commerce, Science, and Transportation, United States Senate and the Committee on Energy and Commerce, House of Representatives, Ninety-seventh Congress, first session on proposed purchase of Marathon Oil Co. by Mobil Oil Corp., November 23, and December 14, 1981. Washington, D.C: U.S. G.P.O. Read More