Merger, Acquisition, and International Strategies - Coursework Example

Mergers and Acquisition Merger, Acquisition, and International Strategies Introduction Mergers and acquisition represent a situation in the transformation of a company. It can determine its growth or its collapse. Merging is a way of bringing together more than one companies so that they work under the same management. The process of owning an asset is when the strong company takes over the smaller company’s major innovation or a portion of it. These two terms are used together because they depict the exact need and meaning of what goes on. For any company to realize any improvement the efforts depend on how best it can manage the acquired product (Haspeslagh & Jemison, 1991). Microsoft Corporation is a public company. It is a software manufacturer with the best quality in the current world. It has the best history in the technology industry as well as the ability to acquire other small companies. Reports show that it has managed to acquire more than 50 companies with the capability (Das & Wingflield, 2011) of taking 10 of them each year. Back in 2011 Microsoft Corporation, acquired The Skype Technologies at a whooping cost $8.5 billion. SolveForce is a small company currently offering its technological services in the United States. It provides Ethernet internet services to its customers (SolveForce.com). Since it is a small company, it has not merged up or acquired by any other major company so far. This company appreciates the fact that the world is fast growing and that it requires high-speed internet solution. It was established back in 2004 and has shown a nice progress since then. 1. An analysis of the Microsoft’s strategy. Attributing that Microsoft Corporation is a multi-national company makes it easy to for it to acquire and absorb small companies in its business. It is a very successful software developer thus making it a global brand. Therefore, it was so easy to incorporate Skype into Microsoft despite the stiff competition that Face Book brought in acquiring the technology. At some point, somebody can ask why the company did not come up with such a similar product as compared to buying Skype itself. Skype technology is a free voice and video communication technology that connects users. It has more that 500 million users with at least 60% being premium users. To maintain this steady customer use, Microsoft had to buy it fully. In addition, Skype was compatible with most of the Microsoft’s technologies thus very suitable and easy to use. From this acquisition, Microsoft reaps many goodies. They include a cut in the cost of making and investing in IP telephone services. The company as well has a competitive advantage against its main rival, Google that is good at inventing similar devices. A keen look into the 2010 annual report, the company had a great sale in the software deals. Very confidently, the introduction of the Skype network was of great value to the company because it the profits increased. The Skype technologies have seen an increase in demand of the company’s products. The acquisition in my own opinion was the best move for the company. However, most companies suffer great losses due to difficulties in successfully attending to the new technology. Microsoft made the owner of Skype the President of the Skype division under its company to make it an effective venture (Microsoft, 2011). 2. the major candidate for SolveForce Already, the company has a customer base around its Headquarters; Los Angeles. Since it provides internet solutions to its customers, the best company that can take it up is the Cisco technologies. Cisco is an international internet providing company. From the description of its services, it can be noted that SolveForce is a group of consultants. Most probably, all of these experts have some good knowledge about the Cisco management issues and other computer related studies. By merging with Cisco, the company will benefit from the great technological advancements that are soothing to the customers. Since Cisco is a trusted internet provider across the world, it will be so easy for SolveForce to enjoy a huge customer base and trust as well. In addition, their current innovation will undergo upgrading to reach the current level. I believe that SolveForce was a great innovation. However, since it is a small company with a small capital base, it has only managed to provide services around Los Angeles. By merging up with the Cisco technologies, they will be in a position to expand to and offer their services to other towns and even beyond the United States. Depending on the agreed period, am sure by the time the contract ends, SolveForce will be in a good position to provide exemplary services across the world. It is only by merging with other companies that we realize great potential behind bright ideas. 3. Business level strategy for Microsoft Company For the Microsoft Company to compete effectively with other multi-national companies it has to come up with international-level strategies. The increase in global demand for technological products has made the company to come up with an enterprise strategy that helps put all businesses in line with current technology. Currently for a business to survive in the competitive world, it has to incorporate the latest technology in its daily operations. The enterprise strategy (Hagstedt et al, 2011) is under the leadership of the architect personnel. This is because the company itself best knows the daily activities. The enterprise strategy program enables users to align their technological goals with the business ideas, take advantage on the investment strategies, unlock potential and facilitate long lasting innovations. This strategy is important to all users of Microsoft products. However, for the company to make improvement on this strategy, I recommend that they standardize their technological effects. This will ensure that everybody across the globe has an understanding on how to operate the systems. On the contrary, the company can spread awareness about its products so that those who have little information on operating the systems can get the interest. Through this, the company will see a great improvement in the marketing of its major products in the competitive market. 4. Business and corporate level strategies Strategies help the company to gain a competitive advantage in the current market. There are three levels of strategy formulation. They are the business, corporate and functional levels. In this case, the business and corporate level strategies will be the guide. At most time, there is a tendency to associate business and corporate matters when running daily activities in a firm. However, in accordance to strategies they are very different thus must receive treatment as individual components. Ideally, a business level strategy plays a key role in handling matters that directly relate to the position of the firm. The corporate level strategy on the other hand is concerned with matters that can surpass the main activities of the business. In relation to the business level strategy, I propose that the organization should work very hard to establish a strong base. In this case, it has to bring out the uniqueness in its products that can be appealing to the customers. At the same time, it has to make sure that the products for the target market are relevant and cost effective. bearing in mind that there are so many competitors in the technology industry with the major giants taking up major market, slots it has to be keen on pricing. The business level strategy determines how the company places itself in the competitive environment. The corporate level strategy involves the organization at large. Therefore, the company has to be keen on how the business responds to the commands. With this, it might be easy for the management to know if it is necessary to introduce other related substitutes along the major product. In addition, it can help in identifying the best option to deal with in a business. Since it has not been involved in mergers and acquisition the corporate level strategy can be the best way for it to know what combination can help it in realizing its full potential. True to the fact, most small companies have very little capital and thus the slow growth. The corporate strategy is the main defense of the shareholders. By observing this strategy, the company can create nice revenue links and networks with interested investors. Conclusion Through merging and acquisition, companies realize great potential in their ideas. While at some point such missions fail, concentration and high quality management can see such an idea grow beyond imagination. Microsoft went ahead to buy Skype even when other giant companies were against the idea. Currently, it is among one of its successful business attempts in history. Everybody loves Skyping and this has made the company reach out to new markets thus expanding its base. SolveForce though a small company, it has the potential to grow and realize its goals. Collaborating with giant companies like Cisco will see them hit the target of being the best internet providers across the United States and in the whole world. It all requires determination and perseverance among other things. References Das. A. & Wingflield. N. (2011, May 10).Microsoft Near Deal to Acquire Skype. The Wall Street Journal. Retrieved from http://online.wsj.com/news/articles/SB10001424052748703730804576313932659388852 Hagstedt. K., Hakansson. E. & Thideman. J. (2011). Microsoft & Skype: Corporate Strategy 2011. Haspeslagh, P. C., Jamieson. D. B. (1991). Managing Acquisitions: Creating Value through Corporate Renewal. New York: Free Press. Microsoft (2011). Microsofts Business. Available at: http://www.microsoft.com/about/companyinformation/ourbusinesses/en/us/business.aspx [Accessed 05 December 2011] SolveForce. (2013). Real-Time Telcom Services. Retrieved from http://www.solveforce.com Read More