Merger and Acquisition - A Strategy for Corporate Growth

Two companies that are recognized as among the best at making successful acquisitions are General Electric and Cisco Systems. These companies have been star performers in growing shareholder value. The core principal that runs through almost every acquisition is integration. Over the past 10 years Cisco Systems has acquired 81 companies. Their stock price is up a remarkable 1300%. GE outperformed the S&P 500 index over the same period by 300%. There are several categories of strategic acquisition that can produce some outstanding results:

1. ACQUIRE CUSTOMERS - this is almost always a factor in strategic acquisitions. Some companies buy another that is in the same business in a different geography. They get to integrate market presence, brand awareness, and market momentum.

2. OPERATING LEVERAGE - the major focus in this type of acquisition is to improve profit margins through higher utilization rates for plant and equipment. A manufacturer of cardboard containers that is operating at 65% of capacity buys a smaller similar manufacturer. The acquired company's plant is sold, all but two machines are sold, the G&A staff are let go and the new customers are served more cost effectively.

3. CAPITALIZE ON A COMPANY STRENGTH - this is why Cisco and GE have been so successful with their acquisitions. They are so strong in so many areas, that the acquired company gets the benefit of many of those strengths. A very powerful business accelerator is to acquire a company that has a complementary product that is used by your installed customer base. Management depth and skill, production efficiency/ capacity, large base of installed accounts, developed sales and distribution channels, and brand recognition are examples of strengths that can power post acquisition performance.

4. COVER A WEAKNESS - This requires a good deal of objectivity from the acquiring company in recognizing and chinks in the corporate armor. Let me help you with some suggestions - 1. Customer concentration; 2. Product concentration; 3. Weak product pipeline; 4. Lack of management depth or technical expertise and 5. Great technology and products - poor sales and marketing.

5. BUY A LOW COST SUPPLIER - this integration strategy is typically aimed at improving profit margins rather than growing revenues. If your product is comprised of several manufactured components, one way to improve corporate profitability is to acquire one of those suppliers. You achieve greater control of overall costs, availability of supply, and greater value-add to your end product

6. IMPROVING OR COMPLETING A PRODUCT LINE - this approach has several elements from other acquisition strategies. Successfully adding new products to a line improves profitability and revenue growth. Giving a sales force more "arrows in their quiver" is a powerful growth strategy. You take advantage of your existing sales and distribution channel (strength). You may be able to improve your competitive position by simplifying the buying process - providing your customers one stop shopping.

7. TECHNOLOGY - BUILD OR BUY? This is a quandary for most companies, but is especially acute for technology companies. Acquiring technology through acquisition can be an excellent growth strategy. The R&D costs are generally lower for these smaller, agile, more narrowly focused companies than their larger, higher overhead acquirers. Time to market, window of opportunity, first mover advantage can have a huge impact on the ultimate success of a product. First one to establish their product as the "standard" is the big winner

8. ACQUISITION TO PROVIDE SCALE AND ACCESS TO CAPITAL MARKETS - In this area, bigger is better. Larger companies are considered safer investments. Larger companies command larger valuation multiples. Some companies make acquisitions in order to get big enough to attract public capital in the form of an IPO or investments from Private Equity Groups.

9. PROTECT AND EXPAND MATURE PRODUCT LINES - This has been very effectively done in the pharmaceutical sector where a new technology is acquired to repurpose and re patent drugs.

10. PROTECT CUSTOMER BASE FROM COMPETITION - The telephone companies have done studies that show that with each additional product or service that a customer uses, the likelihood of the customer defecting to a competitor drops exponentially. Get your customers to use local, long distance, cellular, cable, broadband, etc and you will not lose them. Multiple products and services provided to the same customer dramatically improve retention rates.

11. ACQUISITION TO REMOVE BARRIERS TO ENTRY - For example, a large commercial IT consulting firm acquires a technology consulting firm that specializes in the Federal Government. The larger IT consulting firm has valuable expertise that is easily transferable to government business if they could only break the code of the vendor approval process. After many fits and starts, they simply acquired a firm that had an established presence. They were able to then bring their full capabilities from the commercial side to effectively increase their newly acquired government business.

Many larger firms have established business development offices to execute corporate growth strategies through acquisition. These experienced buyers search for companies that fit their well-defined acquisition criteria. In most cases they are attempting to buy companies that are not actively for sale. The win for the successful corporate acquirer is to target several candidates, buy them at financial valuation multiples, integrate to strength and achieve strategic performance.

free design software android market USB Storage

Continuar leyendo

Ocultar articulo

Fusion hybrid model acquisition for connecting emerging companies with large companies

No risk, no reward is one of the oldest proverbs in the economy. This formulation of strategic risks was the first time in writing by the Greek scholar Herodotus in 450 BC for the expression

In the area of ​​mergers and acquisitions, the challenge for many companies in a desirable product or technology has been preserved, while the risk capital as possible.

While growth through merger and acquisition strategy continues to be very popular - in 2006 there were a record $ 3.6Billions of dollars in mergers and acquisitions, according to Thompson Financial - offers many CEOs and CFOs to remain cautious. In a recent survey of major corporate executives by Accenture, 45 percent reported their recent merger and acquisition does not provide all had the expected result.

A solution for real tradition is a fusion hybrid model of acquisition. It is becoming increasingly popular.

In a hybrid of merger and acquisition agreement, alarge public institution is involved in (typically from 10 to 50 percent) in a smaller company (public or private). Generally, this equity infusion comes with a call option to acquire the right to forgive the entire company in an evaluation metric later date.

The hybrid model has been successfully implemented by Cisco Systems, which began more than a decade. Between 1993 and 2007, Cisco 119 acquisitions, many of which are in start-ups or small businesseswith limited power.

There are three main advantages for the parent company's equity in the hybrid model:

Diversified investments to reduce the overall risk.

Access to new technologies and products obtained at minimal cost.

Managed resources are not dissipated.

For example, a company is willing to spend $ 250 million in a direct purchase of a company established to invest or take a dozen $ 5 million $ 25 million equity investment in start-ups.

InConsumer goods sector, we can look at Dean Foods, the leading U.S. manufacturer of liquid milk and dairy products, an example of an acquisition successful hybrids.

Dean Foods supermarket buyers know organically through its many local brands as Borden, Pet, Country Fresh, Meadow Gold and Horizon.

One of the most successful acquisitions was Dean White Wave, a company of organic food. It 'was founded in 1976 by Steve Demos, a pioneer in organic food. He took Silk soy milkin 1996, as well as the boom in organic food has begun. In 1999, Dean Foods has bought a 25 percent to $ 5,000,000. Dean favored by "smart money" product sales increased by more than $ 250 million in 2004, when Dean acquired the remaining 75 percent of White Wave for $ 224 million.

Dean, as part of the tradition of Cisco, has left an entrepreneur demo and its management team in place and allow the company to operate with great autonomy. The result was a winning result. Until 2005, Dean Foodsmore than $ 10800000000 in sales and was the largest of Kellogg and HJ Heinz.

With successes like these, it may seem surprising, we do not see the offer more hybrids. The reality is the hybrid concept aiming points of resistance for both the seller and the buyer. Among these entrepreneurs who by the splendor of venture capital are attracted, and CEOs and CFOs of large companies that continue to equate ownership with control.

Retrieve an attachment from a venture capital firm has a largeCharm for entrepreneurs. Many believe that the entrepreneur first, means that more VC money on it "big leagues." From What we often overlook are the chances of length.

According to Jim Caspari, founder and CEO of the Alliance Venture received, the chances of a first-time entrepreneurial venture funding are less than 3 percent. He reported that in 2005, 125,000 of pitches to prospective venture capitalists, supported only 2939. The average amount drawn to $ 7.4Million €.

If an entrepreneur has the eye of a VC firm can be punished with reviews face high costs and lengthy review by multiple parties.

From the perspective of the buyer, the resistance comes from the hybrid fusion of traditional culture in many companies, who found the "property" is equivalent to 100 percent and a centralized control, top-down decision-making process.

However, there are more and more companies in the world to understand accelerated the 21 CenturyCompetition is essential to diversify its product development, investing in different projects. You are seeing the advantage of promoting entrepreneurship within the wider corporate structure to improve motivation and creative thinking.

A purchase hybrid can provide a company with an effective vehicle to learn about new products and technologies. It can also serve as a platform for further acquisitions.

C-level executives,however, must understand that dealing with the employers require a particular mentality. Many founders are very proud of their company and the protection of their products, and want to maintain a high degree of control.

If both sides realize the benefits of hybrid acquisition, synergies can be very rewarding place. Because we always pay to see more hybrid acquisitions, the concept is apparently no longer dared, but a fundamental part of many mergers andAcquisition strategies.

android market

Continuar leyendo

Ocultar articulo

The implementation of a data acquisition system - thin or thick client?

Do not choose wisely when deciding on a solution of thin client or thick

Every time you "choose not to care 'or a variant of the phrase that I always with the third" Indiana Jones and the Holy Grail movie and the scene reminded me of when the knight guarding the Holy Grail is in the cave listening says: "He chose poorly." This was the German colonel died when drinking water from the wrong cup. In the world of client / server architecture, it is important"Choose wisely" when you realize that the workload of the client or the server that handles the crowd. With clients, we understand the application of this workstation is running on a personal computer or server and relies on you to do. While they are common, there are many differences between thick and thin clients. By the way, we refer to thick and thin as the hardware (for example, how a PC communicates with the server), but the terms are used todescribe the applications. short, thick-client application is a server running in a central location or on a thin-client application can perform remote military depots in various locations such as branch offices o. And while the market offers both thick and critical data collection of client applications in various shapes and sizes to meet slim, how to choose, which is one for your business and budget.

Thin Client

A thin clientwas developed especially small so that the bulk of data processing is done on the server. Although the term thin client software is often referred to, is increasingly being used for computer architectures, such as computer networking and networked PCs, servers to serve as customers for customers. A thin client is a computer network as a unit operates without the need for a hard disk. They act as a simple terminal for the server and requires constantCommunication with the server as well. With a data acquisition system of the conquest of the actual document, first living on the thin client computer, but is stored on the server. The thin client (web) application can then tell the server what to do or save the document indexes. In areas with a slow network response, thin-client software, the night will be planned to send scanned documents to servers at certain times of day, or, ifThe network traffic is light.

A thin client solution for data collection may be right for you if distributed or remote office locations and want to be able to collect and process data on these sites instead of sending documents to a central data center. In this case, you can reduce costs and enhance security (no lost documents in the mail) for scanning and detection distance. Furthermore, by accessing the application for acquisition using a Web browser,There is no software to install and configure each user's computer, resulting in easy scalability and low initial and ongoing IT investments. Both named user licenses and licenses for concurrent users based in the thin-client market, but our advice is to find a concurrent user model, especially if you have multiple offices or remote locations.

Thick Client

In contrast, a thick client (also known as fat client) is aapplications that run most of the processing in client / server. The collection of customer data in thickness, there is no need for continuous server communications as the main storage of information to communicate to the server. As in the case of a thin client, the term is often used to refer to the software, but it is also used to describe the networked computers.

If your company does not participate in branch offices or distributed locations or who are notNeed for a variety of locations and to name user licenses you would probably want to consider a thick client solution for data collection. Also, if your applications require multi-media components, or bandwidth, we will consider whether to go with a thick client solution as well. One of the biggest advantages of thick clients is in the nature of some operating systems and software will not run efficiently on thin clients due to resource problems. DickCustomers can treat these problems as they have their resources.

At the end of the day, at the option of a thin client or thick-Client Solution for the collection of data, you must check whether the company to collect and process documents remotely or centrally and where you want to process the majority of your site. Like the knight in Indiana Jones movie, you should "choose wisely."

Look for our next article on the fourth of five Key Data CaptureImplementation flaw: The choice of size flexibility.

Wireless Printer All in one freedesignsoftware Plantronics Bluetooth

Continuar leyendo

Ocultar articulo