A Case Study On Southwest And Will Address Acquisitions

871 WordsFeb 25, 20164 Pages
Mergers and acquisitions have always been around and have been popular in the United States for decades. It has been said that that mergers and acquisitions have contributed to the reconstruction of businesses during the 80’s and 90’s. The following is an analysis of a case study on Southwest and will address acquisitions, mergers, and restructuring. Acquisitions are popular in the United States and there are many reasons why a company decides to acquire another company. Companies will decide to acquire a business in order to increase market power. Market power happens when a company sells its good or services above competitive levels. If a company attains a high market power, it can become a leader (Hitt, Ireland, & Hoskisson, 2015). Acquisitions that are “competing in the same industry as the acquiring firm is called a Horizontal acquisitions” Horizontal acquisitions also increase a company’s market power. According to the class textbook, horizontal acquisition are a result in higher performance when a company have similar characteristics (Hitt, Ireland, & Hoskisson, 2015). For example, has somewhat of the same strategy and decision-making styles. Another type of acquisition is vertical acquisitions, which refers to a company who purchases a supplier or a distribution of products they use. A vertical acquisition gives the firm additional controls (Hitt, Ireland, & Hoskisson, 2015). A merger is a strategy where two companies agree to combine. Mergers are popular among

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