Effect of Business Acquisition to Get Competitive Advantage Based on the Case Study: Acquisition of Somerfield by Co-Operative Group

1733 Words Sep 28th, 2011 7 Pages
Effect of business acquisition to get competitive advantage based on the case study: Acquisition of Somerfield by Co-operative group

Background:
Business acquisition is one of the most vital tools to expand an existing business effectively. An acquisition takes place when an existing company buys another company which has more or less similar operating activities and ended up controlling it. It is clearly different from merger which is the integration of a business with another and sharing the control of the combined businesses collectively. Mergers and acquisitions (M&As) have long been considered as an one of the most highly appreciated method to achieve the desired growth rate and satisfying the key stakeholders. With rapid
…show more content…
Managing the process of acquisition correctly is the major challenge to make an acquisition work. A number of different factors that ranges from setting well defined goals to look for circumstances under which it will make sense to walk away must be carefully considered to make a successful acquisition. In order to carry out an acquisition activity one must first understand whether the business is ready for it. A SWOT (strengths, weaknesses, opportunities and threats) analysis can be carried out to assess the condition of the business as it might give a clear direction about how to take maximum advantage of the strengths, resolve weaknesses, exploit opportunities and avoid threats. Another way to understand whether the business is ready for an acquisition is to carrying out a strategic gap analysis. This involves identifying where the business stands now where one wants to see it after a defined period of time. By identifying the gap between the two one can decide whether acquisition is well enough to bridge the gap. However the extent of planning and research that can be done before making an acquisition decision does not always prove to be enough as situations outside of control may arise and one have to be prepared for these risks. Degree of uncertainty and the time and effort that are spent for the deal can in effect damage the performance
Open Document