Mergers and Acquisations
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Case Study 7 – 1
How does a cross border acquisition strategy become critical source of competitive advantage for United States, United Kingdom, Spanish, and Japanese and Indian firms?
Reduce trade barriers of entry.
Barriers to entry are designed to block potential entrants from entering a market profitably. They seek to protect the monopoly power of existing firms in an industry and therefore maintain monopoly profits in the long run. Barriers to entry have the effect of making a market less contestable. When the organization can cross the border of the acquisition , the competition can be reduce in the market when the dominant organization acquire the weak company.
Better serve the local market by using local talent.
Using local talent is important when the company open the new branches in other countries. Sure , the new place have new cultures and policies. The differentiation that exists sometimes will give big impact on sales and performance of the organization. The relevant use the local talent is about the local people much know the necessities, culture and do and do not of the local places. For the example , McDonald should hire the local talent in India. It is because , the local employees , much know the Indian needs. Besides that , the Indians cannot be offered the products that contains beef because of religion believing.
In your opinion, as CEO for one of these big firms, what are the main expected challenges that your organization may encounter when implementing cross border merger and acquisition strategy?
Difficulties in adapting the local cultures.
Living in a foreign country is hard enough as it is, with all the administrational issues that the organizations have to deal with. But if the organizations dont want to get stuck in the expat bubble, they need to learn to adjust to life in a foreign country. For the example , If McDonald want to open the branches in India , they need to make sure beef will be not provided. As we known, Indian belief that beef quite sensitive to their religion believing.
Legal challenges and difficulties.
The negotiation and documentation of the acquisition of a company includes many legal issues. When acquiring a company, you should consult legal counsel before the contract negotiations begin to determine the structure, price, and any liability issues. Below please find a summary of the legal issues to be addressed in any transaction.
The acquisition of a company will involve the purchase of all or a controlling interest in the stock, partnership, or membership interests or the acquisition of all or substantially all of the companys business assets. The buyer often prefers to acquire only the companys