Looking into the examples of acquisitions that prospered

Looking into the examples of acquisitions that prospered

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Listed below are some business strategies relating to acquisitions

Prior to diving right into the ins and outs of acquisition strategies, the very first thing to do is have a firm understanding on what an acquisition truly is. Not to be mixed-up with a merger, an acquisition is when one business purchases either the majority, or all of another company's shares to gain control of that firm. Generally-speaking, there are approximately 3 types of acquisitions that are most typical in the business realm, as business individuals like Robert F. Smith would likely recognize. One of the most typical types of acquisition strategies in business is known as a horizontal acquisition. So, what does this suggest? Basically, a horizontal acquisition involves one company acquiring an additional business that is in the same market and is performing at a comparable level. The two companies are primarily part of the exact same industry and are on a level playing field, whether that's in manufacturing, finance and business, or farming etc. Typically, they might even be considered 'rivals' with one another. Overall, the major advantage of a horizontal acquisition is the increased potential of boosting a company's consumer base and market share, in addition to opening-up the opportunity to help a firm grow its reach into new markets.

Among the many types of acquisition strategies, there are 2 that people tend to confuse with each other, maybe due to the similar-sounding names. These are called 'conglomerate' and 'congeneric' acquisitions, which are two rather distinct strategies. To put it simply, a conglomerate acquisition is when the acquirer and the target firm are in totally unrelated markets or engaged in separate endeavors. There have been numerous successful acquisition examples in business that have included two starkly different businesses with no overlapping operations. Normally, the aim of this approach is diversification. For example, in a scenario where one services or product is struggling in the current market, businesses that also own a diverse variety of other services and products tend to be much more secure. On the other hand, a congeneric acquisition is when the acquiring company and the acquired firm are part of a comparable sector and sell to the same kind of consumer but have slightly different services or products. Among the main reasons why firms could choose to do this sort of acquisition is to simply expand its product lines, as business individuals like Marc Rowan would likely confirm.

Many individuals assume that the acquisition process steps are constantly the same, whatever the company is. Nevertheless, this is a common misunderstanding due to the fact that there are actually over 3 types of acquisitions in business, all of which come with their own procedures and approaches. As business individuals like Arvid Trolle would likely confirm, one of the most frequently-seen acquisition techniques is called a vertical acquisition. Essentially, this acquisition is the polar opposite of a horizontal acquisition; it is where one business acquires another company that is in a completely different place on the supply chain. As an example, the acquirer firm may be higher up on the supply chain but opt to acquire a firm that is involved in a key part of their business operations. Generally, the appeal of vertical acquisitions is that they can generate new income streams for the businesses, in addition to decrease prices of manufacturing and streamline operations.