Acquisition Is A Useful Tool For Business Growth By The Means Of The Acquisition Of Another Firm

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“Firms achieve growth by the means of the acquisition of another firm”. Discuss. Abstract There is an on-going debate regarding the issue of acquisition with regard to the advantages and disadvantages of acquisition. There are some claims that acquisition producing positive outcomes and drives companies toward success. However, the acquisition is mainly considered to produce more negative outcomes and drive companies toward failure. Company acquisition is better to be described from a point of considering as expansion processes where a company is purchasing another company for the purpose of maximizing profit. Even though there are some disadvantages of acquisition, but acquisition is a useful tool for business growth, such as management…show more content…
According to the Oxford academic English dictionary (2014,p.10), acquisition means the buying or obtaining of assets or objects. Acquisition occurs when a company buys another company and controlling it. Moreover, acquisition can be divided into two types. The first type is horizontal acquisition, when the same kinds of businesses are involved: for example, an online delivery company buying another online delivery company. The second type of acquisition is vertical acquisition, when different kinds of businesses are doing the acquiring: for instance, an online delivery company buying a supermarket (Simon and Andrew, 2009, p.10). Moreover, this essay will concentrate on horizontal acquisition rather than vertical acquisition. This essay aims to argue that acquisition is often the best way to grow, but in some case is not successful, so acquisition does not always mean growth, but it is a useful tool for maximizing the profit of firms. In order to demonstrate this, the essay will first focus on advantages of acquisition. Secondly, the essay will focus on the disadvantages of acquisition. Thirdly, management buyouts will be identified as a useful tool for achieving growth. Lastly, this essay will examine the benefit of Management buyouts. 1) Advantages of acquisition The advantages of acquisition can be considered as the reasons behind the
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