Case Study: 7-(Manchester United and Japan Tabacco)
1. How does a cross border acquisition strategy become a critical source of competitive advantage for the United States, United Kingdom, Spanish, Japanese and Indian firms?
It is believed that a cross border acquisition strategy creates competitive advantage for the UK, US, Spanis, Japanese and Indian firms in a way that it would increase capital or revenues of the acquiring firms. As mentioned in the case study, when Japan Tobacco acquires British Tobacco, the Japanese firms in return get an opportunity to build up its overseas capital. This situation happens, especially when the low currency values in European as compared ...view middle of the document...
If the acquired firms used advanced technology than Latin American firms, then the firms gets the opportunity to copy the technology, and vice versa.
2. 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?
There are many expected challenges for the cross border acquisition and merger. As discussed here are the main expected challenges that the organization may encounter when implementing cross border merger and acquisition strategy. First, political issues become the challenges to this business strategy as the firms may encounter the difference principle and value between the countries. This situation happens due to the politically sensitive in terms of security and defense. For example, if the Chinese firms want to merge with Israeli firms, then the Chinese firms must think of the consequences or impact that they will get especially from Muslims consumer whom largely boycott any product or services from Israel.
Next, the challenges of cross border acquisition and merger that should take into account is when the business as a result of merging become too large. This means, when the scope of the business becomes too large or wide, there is a possibility for the combined firms to fail to be handled. This situation may be happens when the leader finds difficulties to handle as the firms have too many employees, tasks and product to produce. As a result of that, the productionof the firm become less innovative. The same situation happens when businesses of the combines firms become too much diversification. Supposed diversification bring significant to the firms however, it is believed that when both of the combine firms covered too many areas of business, the tendency of the firms to mismanage it is high, which as a result lead to an unsuccessful business strategy. Also, there is another situation when the merging firms fail to be handled as a result of different culture and belief of the combine countries which as a result create conflicts to the leaders. This situation happens, when each of the firms practices, culture and belief from its origin country which as a result leads to clash of cultures between the combined firms. For example, the US employees do not use to do over time as compared to Malaysian employees. If the US and Malaysiaâ€™s firms merger, there are changes that both of the firms having culture clash.
3. In recent years, the firms in the developed countries such as United States and United Kingdom have become the main target of cross border acquisitions. Other than having open policies, what are the firmsâ€™ other motivations?
What motivates of the firms to merge with the United States and United Kingdom firms is due to the changes of strengthening the position of the firmâ€™s brand name in the US and UK marketplace. This is because, having an opportunity to strengthening the...