Googles Strategy for Acquiring Motorola - Assignment Example

Merger, acquisition and international strategies of Google’s strategy for acquiring Motorola Google is a United States based publicly listed software company that has so far acquired more than 150 software companies to strengthen its position in different segments of software engineering. However, Motorola was Google’s largest investment so far in merger and acquisition (Google, 2014). The primary reason for this kind of an investment in an almost unprofitable hardware company such as Motorola was Google’s strategy to enter the mobile device industry. In the software industry, Google has earned strong brand reputation but to strengthen its position in mobile device industry and compete against companies such as Apple, HTC and Microsoft, the company had to acquire Motorola (The Wall Street Journal, 2012). The various reasons that Google presented in support of selecting Motorola as its device manufacturer are as follows. Google’s primary reason of acquiring Motorola is acquisition of strong patent portfolio of the hardware company. According to studies, it was observed that the patents of Motorola will enable the software giant to achieve comparative advantage in the Intellectual Property Right landscape and protect its android ecosystem. Additionally, Google recognized the increasing demand of low cost android smart phones worldwide and that brand reputation matters to a great extent to majority of consumers. Products by Apple, HTC and Samsung were not as cost effective as Google backed Motorola products such as Moto E, Moto G and Moto X. Recent studies suggest that consumers purchased these products primarily because of lower cost compared to competitors’ products and due to brand name of Google (Google, 2014; Forbes, 2014; The Wall Street Journal, 2012). The other reasons that support this acquisition are history of Motorola as a very successful integrator of hardware and Google’s competition against Microsoft. The reason for selecting Motorola over any other hardware company by Google is quality of product. Motorola is one of those of company that produce high quality handsets at low cost and this was reflected in the products as well (Google, 2014). Another reason behind this decision is acquisition of Nokia by Microsoft and development of low cost windows phones. Comparative analysis suggests that in the given price range Google phones were preferred more by consumers over windows phones. It can be assumed that a company as innovative as Google anticipated this success and therefore acquired Motorola (Forbes, 2013; Bloomberg, 2014). Potentials of 21st Century Fox as a company worth acquiring 21st Century Fox Inc. is an US based global media and entertainment corporation listed at NASDAQ, ASX and S&P 500. The company has diversified business in sectors such as cable network programming, television, filmed entertainment and direct broadcasting. The company is primarily involved in production of license news, business news, sports, general entertainment and movie production and distribution. Due to globalised nature of its business the company ensures that it abide by government regulation of various nations and do not broadcast inappropriate matters (21st Century Fox, 2013). The company presently broadcasts its programs in Latin America, Europe, Asia and other locations and has earned great brand equity in various countries. Earlier, the company was a part of News Corporation and became an independent public organization in 2013. The company has about 1.5 billion subscribers to whom it reaches through approximately 50 local languages on a regular basis. The annual report of the company suggests that the company monitors continuously various pending legislation and regulatory initiatives at national and international level so as to strengthen its strategic positioning as a premier media and broadcasting company (21st Century Fox, 2013). 21st Century Fox has invested significantly to secure its position and protect its intellectual property in the US as well as in other countries. The intellectual property assets of the company include copyrights in motion pictures, books, television programming, websites, technologies and publications; trademarks in logos, characters, domain names, logos; patents for innovative products and business methods and license of different intellectual property rights (21st Century Fox, 2013). The financial position of the company is also very strong as per the annual report of the company. The financial position as studied at NASDAQ reflects that the company’s revenue has growth significantly from 2013 to 2014 and the P/E ratio has almost doubled from 11.87% in 2013 to 22.68% in 2014. Moreover, ratio analysis reflects that the short-term as well as long-term position of the company is very stable (NASDAQ, 2014). The complete analysis suggest that from financial as well as non-financial perspective, if any corporation acquire or merge with 21st Century Fox, it will be a highly profitable venture given the international positioning as well as brand reputation of the company. Evaluation of business and corporate level strategy of McDonalds McDonalds is one of largest American fast food chains that is growing at a rapid rate and is present in approximately 119 countries worldwide. The company sells a variety of fast foods such as burger, wraps and happy meals, along with salads and hot and cold beverages. The success of McDonalds is primarily dependent on the company’s business and corporate strategies, which has been carefully crafted so as to meet consumer requirements in different countries (McDonalds, 2014). Business level strategy The business level strategies are formulated by a firm to achieve comparative advantage over its competitors by exploiting its core competencies within the specific industry. Business level strategies are primarily of two kinds, namely, cost leadership and differentiation. Cost leadership implies ability of a firm to produce products at a comparatively low cost while differentiation implies that the products of a company are unique in terms of its characteristics. McDonalds is one of the few multinational companies that have integrated both differentiation as well as cost leadership in its business strategy. The company differentiates its products by selling specific products in different countries so that the products are acceptable socially as well as culturally. Moreover, the company buys its products from local vendors and suppliers in different countries and has a strong supply chain network which helps the company in cost reduction (McDonalds, 2014; Hitt, Ireland & Hoskisson, 2012). Corporate level strategy The corporate level strategies have supported McDonalds to a great extent to achieve its success at domestic as well as international market. Studies suggest that the strategies that McDonalds has implemented at its corporate level include focus on a single business, related diversification, international expansion and vertical integration. McDonalds has always pursued business in the fast food industry and have undertaken initiatives to create products within the periphery. Related diversification can be observed in the products that the company serves. Besides, burgers and value meals, the company has added a variety of beverages in its menu. International expansion has contributed sufficiently in the company’s growth. Internationalization has presented the company opportunity to grow extensively without facing issues related to market saturation. In this context, it is important to note that the company has responded appropriately by creating products as per consumer requirement in different nations. Lastly, through vertical integration, McDonalds was successful in reducing its resource and production cost (McDonalds, 2014; Hitt, Ireland & Hoskisson, 2012). Recommendations McDonalds has earned sufficient brand equity in national as well as international market as a fast food joint but the company needs to work on recognizing greater opportunities in countries where the company has limited outlets and meet market demand. Furthermore, it is a common notion among consumers that fast food is unhealthy. Such issues need to be resolved by the company so as to have better consumer base. Proposed business and corporate strategies for Toll Brothers Toll Brothers is an US based fortune 1000 company listed in New York Stock Exchange. The company is a domestic real estate company that primarily operates in about 20 states of the United States. The company is well known for acquiring and developing of premium residential and commercial projects. The primary strategy that the company has implemented so far is personalized choice. The company presents consumers with the option to select home design so as to deliver greater satisfaction (Toll Brothers, 2014). Business strategy The primary business strategy that the company has implemented so far is differentiation. The company is well known for personalized choices and solutions it provides to its consumers. However, the company is mainly preferred by premium consumers. In the present competitive real estate market, it is important for a company to explore every consumer base. Therefore, a strategy that can be proposed for Toll Brothers is to grow its consumer base by providing services to not only premium consumers but also to middle class as well as upper middle class consumers. It is expected that this step will help the organization earn better brand reputation (Hitt, Ireland & Hoskisson, 2012). Corporate strategy In was observed that the company is a well known brand in context of premium real estate projects. In present competitive market, every organization is trying to develop competitive positioning through international presence and the same is recommended for Toll Brothers. The company require international expansion for strengthen its strategic position. International expansion will improve consumer base for the company as well as the company will be able to recognize locations from where it can access various resources at a lower cost (Hitt, Ireland & Hoskisson, 2012). References 21st Century Fox. (2013). Annual report 2013. Retrieved from http://www.21cf.com/Investor_Relations/Full_List_of_Annual_Reports/. Bloomberg. (2014). Google’s Moto Sale Casts Doubts on Microsoft’s Nokia Plan. Retrieved from http://www.bloomberg.com/news/2014-01-30/google-s-moto-sale-casts-doubts-on-microsoft-s-nokia-plan.html. Forbes. (2013). Be Honest - Are You Any More Likely To Buy A Nokia Windows Phone Now? Retrieved from http://www.forbes.com/sites/roberthof/2013/09/03/be-honest-are-you-any-more-likely-to-buy-a-nokia-windows-phone-now/. Forbes. (2014). Google, Saying It Wants To Focus on Android, Smart Devices, Sells Motorola To Lenovo For $2.91 Billion. Retrieved from http://www.forbes.com/sites/connieguglielmo/2014/01/29/google-sells-motorola-mobility-to-lenovo-for-2-91-billion/. Google. (2014). Facts about Google’s acquisition of Motorola. Retrieved from https://www.google.com/press/motorola/. Hitt, M., Ireland, R. D. & Hoskisson, R. (2012). Strategic management cases: competitiveness and globalization. United States: Cengage Learning. McDonalds. (2014). Our company. Retrieved from http://www.aboutmcdonalds.com/mcd/our_company.html. NASDAQ. (2014). Twenty-First Century Fox, Inc. Stock report. Retrieved from http://www.nasdaq.com/symbol/foxa/stock-report. The Wall Street Journal. (2012). With Motorola, Googles Mobile Balancing Act Begins. Retrieved from http://online.wsj.com/news/articles/SB10001424052702303610504577420052271842714. Toll Brothers. (2014). About Toll Brothers. Retrieved from http://www.tollbrothers.com/about. Read More