what you consider are the key aspects of both firms’ governance mechanisms.
- Based on your review of both firms’ governance policies, did you change your opinion of your chosen firm’s desirability as an employer when compared to your chosen firm’s closest competitor? Why, or why not? In 1100 to 1200.Strategic Management (BA 451-01)
Assignment # 3
Dr. Jimmie S. Warren
February 20, 2022
A merger occurs when a financially stronger corporation acquires the assets and liabilities of another (Frank, 2003). The business that acquires the assets and liabilities of another company preserves its identity while the acquired company ceases to exist. Mergers are a sort of purchase that may include the entire or part of a company’s assets.
Acquisitions are motivated by hoped-for financial rewards (Frank, 2003). For an acquisition to occur, both firms must be valued more than they were before the merger. Acquisitions and mergers provide economies of scale, eliminate inefficiencies, and reduce taxes. Another rationale for M&A is to assure corporate survival in a competitive market. For example, a startup may combine with a large firm in the same field to gain market share. Apple, for example, has a history of mergers and acquisitions, but Hungryroot hasn’t.
Apple Inc. designs, manufactures, and sells personal computers, consumer electronics, hardware, and associated services (Paroutis, Angwin, & Heracleous, 2016). It was created in 1976 in Cupertino, California. Apple’s most popular products include Mac, iPhone, iPad, and iTunes. In addition to Europe, the corporation operates in Asia, North and South America. Microsoft, Samsung Electronics, HTC, Google, and Huawei Technologies are Apple’s main rivals. To stay competitive in the electronics and software markets, the business has acquired other firms.
Analysis of Apple Acquisition Strategy
Apple Inc. just bought Map sense, a startup firm. According to (Paroutis, Angwin, & Heracleous, 2016), Apple purchases companies to add them to its product portfolio. The corporation often acquires small businesses or technology that fit within its product range.
Faced with rising consumer electronics and software rivalry, the business has made multiple acquisitions to become a market leader in electronics and software manufacturing. For example, the corporation saw Map sense as a perfect fit to strengthen its mapping technology (Chmielewski, 2015). Apple’s purchase of a business that makes tools for studying and displaying locations was considered as the finest campaign against Google. It also bought HopStop in 2013 and Coherent Navigation in 2015.
According to Porter, a firm’s position in an industry affects whether it is above or below average (David, 2010). A company’s long-term competitive advantage is the foundation for its profitability above industry norms. Apple has a history of exceeding industry norms in terms of profitability.
Apple’s product portfolios are practically unmatched by rivals like Lenovo and HP. Apple Inc. made a great move by pursuing acquisition methods. based on (Paroutis, Angwin, & Heracleous, 2016) Apple’s strategic connections have made it a digital hub where fresh content can be created and quickly transmitted to other Apple devices. The business credits its purchases for the success of the iPhone, iTunes, and iPod. So, the corporation may penetrate the consumer electronics and entertainment market.
Moreover, the corporate acquisitions have improved its market core strengths (Paroutis, Angwin, & Heracleous, 2016). Silicon Grail, Prismo Graphics, and Nothing real are three video development and production firms that Apple bought in 2002, according to the writers. In 2008, it bought PA Semi, a microprocessor boutique. The business recently purchased Map sense, a mapping and location analysis technology developer.
Apple’s recent purchases, and those it plans to make in the future, were good moves. They have helped it to keep ahead of competitors in the consumer electronics industry. As stated before, most acquisitions are strategic moves to improve a company’s market position. For example, the German music developer purchase enabled Apple to offer distinctive items via iTunes. These purchases also helped the organization stand out in the market. The corporation chooses to acquire companies that create items linked to the company’s product. Map sense was acquired to help the corporation compete with Google in location-based technologies. This and other acquisitions have helped the corporation stay competitive and profitable.
Global Business and Corporate Strategies
Business level strategies are commitments made by a corporation to gain a competitive edge (David, 2010). Differentiation and cost leadership are key company level tactics in big marketplaces. Apple’s business approach is uniqueness. Apple goods are still rare, costly, and difficult to copy. Its ability to combine software and hardware into one component sets it apart from competitors. Its biggest rivals, like Lenovo, use OS from other manufacturers. Apple devices, however, operate on the business’s own OS, iOS, allowing buyers to purchase a product made entirely by one company. The company’s ability to integrate business and marketing strategies with product development offers it a tremendous competitive advantage.
A corporate strategy explains the steps taken by a company to get a competitive edge in the market (David, 2010). In terms of marketing, Apple’s brands are nearly same in the US and other regions. Also, most Apple goods are made in China. This makes them cheaper to manufacture and consequently increases the company’s profit margins.
Reduce prices to gain market share. Apple goods are still costly and not for everyone. Similar items from rivals are still cheaper. To get a competitive edge, the firm depends on great innovation. Providing low-cost items may help the firm expand its market share. Thus, gaining entrée into the enormous market of low-income workers.
McKean and others created Hungryroot, Inc. in 2015 to deliver packaged meals to clients through online ordering (Hungryroot, 2016). Their meal is prepared with fresh veggies and protein.
Suitable Merger Partner for Hungryroot
A beneficial combination between Hungryroot with Starbucks. Dunkin’ Donuts’ merger with Hungryroot has various benefits. First, Dunkin’ Donuts and Hungry Root have a similar business model: good service and unusual cuisine. Dunkin’ Donuts began as a coffee shop and eventually added items to its menu. To supplement the current food options, Dunkin’ Donuts may unite with Hungryroot.
Due to rising competition from Starbucks, Dunkin’ Donuts has had to expand its product line (Schmidt & Oldfield, 2007). Due of Starbucks’ success, Dunkin’ Donuts decided to develop new products to differentiate itself. The fact that Hungryroot solely sells veggies gives them a competitive edge in the market. Success in the beverage sector relies heavily on market differentiation.
Dunkin’ Donuts would also gain entrance into a new market sector by merging. Starbucks specializes on providing customers with coffee. Dunkin’ Donuts will have access to a new market formed by Hungryroot via a merger with Hungryroot. Dunkin’ Donuts’ massive financial capabilities and current infrastructure would provide a significant help to Hungryroot, a young business attempting to acquire market share.
Hungryroot’ Business and Corporate Strategies
Hungryroot’ corporate level strategy should be operational and corporate connected. Hungryroot must use economies of scale to achieve cost leadership via competitive pricing. The firm currently has a distinct product selection, but customers will be more interested if the costs are reasonable. It is advised that the corporation initially focus on the US market, which may be done by merging with Dunkin’ Donuts-like enterprises. After covering the US market, the corporation may expand to other nations like Canada, which has Dunkin’ Donuts.
Hungryroot caters to a niche market of vegetarians. Its core business strategies are distinctiveness and cost leadership.
However, the company’s distinctive cuisine sets it apart from competitors. So, the proposed company level approach is cost leadership. Hungryroot must focus on offering excellent vegetables at low cost. The combination of low cost and health advantages of vegetable rich diets will give them a competitive edge.
Chmielewski, D. (2015). Apple acquires Map sense, a mapping visualization startup.
Retrieved 2016, from http://www.recode.net/2015/9/16/11618606/apple-acquires- map sense-a-mapping-visualization-startup
David, F. R. (2010). Strategic management: Concepts and cases (MyManagementLab series) (13th ed.). Boston: Prentice Hall.
Frank, S. A. (2003). Mergers and acquisitions. Nature, 421(6923), 579–580.
Hungryroot. (2016). Hungryroot. Retrieved 2016, from https://www.hungryroot.com/about
Paroutis, S., Angwin, D., & Heracleous, L. (2016). Practicing strategy: Text and cases. London, United Kingdom: SAGE Publications.
Schmidt, R. A., & Oldfield, B. M. (2007). Dunkin’ Donuts – the birth of a new distribution and franchising concept. Journal of Consumer Marketing, 16(4), 376– 385.