Merger, Acquisition, and International Strategies - Assignment Example

Merger, Acquisition, and International Strategies Number Question Facebook is a company that is specialized in social networking whose establishment in 2002 has substantially transformed the industry. Notably, each of the acquisitions by the company has led to the company’s in question being taken wholly. The social networking giant has witnessed each date of completing the transaction being the date of acquisition. The value of Facebook acquisitions such as the latest one involving WhatsApp is normally stated in United States dollars, since the mother companys head offices are in the country. In the event that the Facebook package that forms the basis of the acquisition by the firm is clear, then it is normally spelt out properly. Facebook has successfully acquired several companies, but the latest acquisition of WhatsApp through purchase is the biggest, in which the former owner of WhatsApp received about $40 per WhatsApp account holder. In total, Facebook paid USD 19 billion for the acquisition completed in the first quarter of 2014 (Berold, 2014). WhatsApp will operate as an independent unit within the social networking giant, with its entire workforce forming part of the transaction. Facebook (FB) was expected to settle WhatsApp $4 billion in liquid cash and $12 billion in shares. Under the deal, WhatsApps owners and employees would be entitled to a further $3 billion in share grants payable if they remained Facebook employees for a period of four years. Jan Koum, WhatsApp’s chief executive, was guaranteed placement on the Facebooks company board. Facebooks acquisition of WhatsApp was primarily a talent acquisition and the obtained products might be shut-down if they become unproductive (Kevin, 2014). Facebook’s, chief executive, Mark Zuckerberg termed the move a strategy of not buying a corporation for the firm, but rather buying the company to get the excellent people working for it. Facebook is well within the investment culture in its acquisition of entrepreneurial minds and culture as evident in the employees of the acquired firm. By succeeding in the acquisitions, Facebook actually managed to acquire the great firm with profoundly skilled employees, founders and a corporate culture. The acquisition of WhatsApp in 2014, added to the company’s more than one billion users and the market capitalization of about $177.78 billion during the period. The value of each Facebook was estimated to be about $136 at the time of the acquisition (Berold, 2014). According to Berold (2014), Facebook is believed to be unconcerned with expanding its revenue base by virtue of the WhatsApp acquisition in the near future, but it is instead concentrating on development. Zuckerberg indicated that he does not foresee trying to vigorously develop WhatsApps income until the number of subscribers reaches a significant threshold. WhatsApp currently levies an annual fee of one dollar after enabling its subscribers to use the service free of charge for one year. WhatsApp’s Koum said that WhatsApps corporate strategy is already effective. In light of this, Facebook’s acquisition of WhatsApp is expected to improve its current messaging services and guarantee the company of long-term sustainability and revenue (Kevin, 2014). Question # 2 TaskRabbit is an American online-based company and mobile platform, which enables subscribers to subcontract tasks for workers in one’s own neighborhood. Through the company’s platform, users can name the job they need executed, quote the value they are ready to settle, and a series of predetermined TaskRabbits would link both ends of workers and recruiters (Sacks, 2013). The company was established by Leah Busque in 2008, and since then it has obtained $37.5 million in pecuniary support. The prelude to TaskRabbit’s founding was the RunMyErrand. The launching of the company in 2008 in Boston, with the initial 100 "runners" marked the beginning of a small American-based job search company (Sacks, 2013). A year later, Tim Ferriss joined the company as a corporate advisor after encountering Busque at a Facebook function dubbed fbFund. The opportunity enabled the company to obtain $1.8 million in funding for seed from investor capital companies, and recruited the firm’s first permanent employee, Brian Leonard. Leonard was a software developer and her co-worker at IBM (Sacks, 2013). The rebranding of the company in April 2010, which the founder described as indicative of fun, spunk, and easy memorability marked a new beginning for the small company. By mid-2010, Busque and her team relocated to San Francisco and opened the business in the city’s Bay Area. Even though, TaskRabbit appears successful in its business operations, Busque should merge with a bigger US employment agency in order to expand its scope and revenue base across the country. One of the most important candidates that could enable the company to improve on its services and gain more revenue is the Job Search USA. Job Search USA was established in 2006 (two years before TaskRabbit), to serve as an all-purpose online platform for job search. The organization provides job listings from different organizations, including charities, small and big firms and educational facilities. Job Search USA’s founding was driven by the concept of bringing together the most effective aspects, design culture and privacy policies of the top American job search platforms. With Job Search as its partner, TaskRabbit will expand its capacity as a top intermediary player between employers and potential workers. Through a merger and or acquisition, TaskRabbit will improve their services by providing simple scalable online platforms, easy interface and responsive client services that are beyond market expectations. Moreover, the resulting merger will enhance the degree of privacy for both ends of the labor market. Moreover, the merger would enable the company to streamline the job search process by easing the opportunities for candidates to apply directly for job placements without signing up for an account on the site (Kevin, 2014). A TaskRabbit-Job Search merger would create an eBay or Amazon for real-world employment agency. Users would be better-placed to update tasks on the joint site in a more seamless manner and declare the highest amount they would part with for it. Through the merger and or acquisition, Job Search would inject the wider network, resources, and reputation to the mix, whilst TaskRabbit would enable the resulting incorporated organization with the specifics required for a successful job search and compensate the end-users with loyalty points as well as pecuniary gifts that would increase the revenue and enhance the level of sustainability of the company. Question # 3 Facebook international business strategy is brilliant because the account holders do the work of generating and posting updates (Kevin, 2014). In many modern companies, seeking the services of paid or voluntary interns constitutes a source of scale and or off shoring jobs to developing societies. With more than one billion unpaid members, half of who are active daily by virtue of demystified access to the site through small mobile gadgets, Facebook is sure to outsource the services of updating the content to virtually anyone in the world. In addition, while Facebook registers more growth, third parties are increasingly capitalizing on the most important aspects of the business; most of the corporate development platforms that company brands are keen on building are guaranteed by Facebook. Facebook’s international corporate-level strategy is based on the brands generating the traffic and creating revenue out of it all (Kevin, 2014). The company is aware that it could not be possible to stay business-focused without brands. In reality, as one of the greatest monetary sources for Facebook, companies are spending millions of dollars to reach the commercial marketing platforms whose successes hinges on the one billion-plus end users (Pack, 2014; Kevin, 2014). In addition, Facebook is one of the American companies that have remained lean and agile internationally. In spite of generating whopping revenues of over $3.7b since 2012, Facebook’s asset value is about $900m (Kevin, 2014). The company avoids unnecessary costs of keeping a large workforce by relying on fewer than 4,000 employees stationed at their Silicon Valley head offices and beyond. The number is far fewer than Google’s 33,000 and Microsoft’s 90,000. This lean team of employees has been able to stay focused, creative and innovative in producing new products and experiences (Berold, 2014). Owing to the lack of corporate and business seriousness at Facebook, there is a need to tighten its security and privacy policies in order to create investor and user confidence. For now, the company’s ads, public relations exercises, and other promotional campaigns will yield very little positive outcomes if the company’s privacy policy remains in its current status. Facebook needs to change the passive nature of its platform use, since government security agencies can use it to eavesdrop on the users to obtain information about their IDs and pictures. This way, more shareholders and prospects will be better placed to overcome the impacts of the IPO debacle. Facebook should also enable customized settings to prevail, rather than subjecting account holders to routine default settings and features. The culture is sucking since the mysterious algorithm dictates which posts are important for the user’s immediate attention (Kevin, 2014). Question # 4 TaskRabbit’s business-level strategy is less effective due to the lack of expert advisors (Sacks, 2013). As such, there is need for the company to seek the services of a team of advisors to help the small entrepreneurship obtain the much-needed inspiration, creativity and innovativeness. This way, TaskRabbit would be better placed to withstand the stiff competition presented by more fledged employment agencies. Business-level experts will enable the company to be in endless update mode, thus respond to changes in the labor market early enough and more effectively. That way, the users and prospects will always have the most important experience achievable in the enjoyment of the services, thus help to maximize the business gains (Pack, 2014). According to Sacks (2013), TaskRabbit should change its update policy for commodities from mainly daily intervals to hourly basis and on real time basis where it is appropriate for the users. It is high time the company took the use of the KISSmetrics platform to the next level by integrating the site with cloud computing platforms and the social media for a wider outreach. To enhance its business processes, the company should carry out regular testing of its user interface by running two hypotheses against each other within one week intervals to evaluate the design, consumer experience or web design aspects of its online platform and applications (Pack, 2014). In addition, TaskRabbit should use more of real photos on the main homepage to increase more sign ups, since this way more visitors to the site will be persuaded to become users. Apart from enhancing TaskRabbit’s business prospects, there is a need to enhance its corporate-level strategy by nurturing its corporate culture from the ordinary business processes. TaskRabbit should focus more on effective branding to enable the company to compete more effectively with other fledged players in the market. According to Pack (2014), TaskRabbit should empower its brand by creating a company culture of an organization that seeks to connect workers with short-term recruiters and full-time employees as well. By hiring the right workforce and creating the appropriate culture, even if it takes TaskRabbit to contemplate strategic mergers and acquisitions, Busque and her team would build a stronger corporate-level strategy of reputable culture and stronger brand that is attractive to the users and prospects. As Pack (2014) has stated, by cultivating a corporate culture of openness, partnership and friendliness, TaskRabbit would be better-placed to fight unfavorable tags such as a company of small task seekers. In a nutshell, TaskRabbit should; adjust to the changing technology environment in order to meet future workers and employer conditions; be more proactive rather than passive in its approach to the needs of both ends; cater to the needs of big companies and charities in the same way as the current small organizations; provide the most effective user-friendly platforms and real-time customer support; and focus more on privacy issues by pulling out unnecessarily personal information from the site. References Berold, K. (3/6/2014). “Why WhatsApp is good for Facebooks business.” Finweek, 36-37. Kevin S. (2/21/2014). “Facebook Gets Much Support For Huge $19 Billion Acquisition.” Investors Business Daily, A04. Pack, T. (2014). “How to Become a TaskRabbit-Or Hire One.” Information Today, 31(1), 38. Sacks, D. (2013). “The Purpose-driven Startup.” Fast Company, 177, 92-106. Read More