In this case we shall use the merger of the information technology giant firm Hewlett Packard (HP) and Compaq which marked the biggest merger in the IT industry. This merger was tactically predetermined by HP as a lucrative way of improving the company’s market position. It was evident that HP had quite a variety of products to offer to the consumers which needed to be melded into a one powerful business. However, the market share of Hewlett Packard at that time was quite low and thus it had to do something so as to improve its client base and consequently improve its performance in the highly competitive IT industry. As a result the company merged with Compaq which was well endowed with an excellent market share. Hence, HP undertook a market positioning strategy so as to improve its market share by capturing the huge client base of Compaq (Kaplan, 2000). In this way the company was also anticipating to improve its product sales due to the increased number of clients and thus this would improve its profitability. Thus, this strategy was directed at enhancing the company’s market maintenance as well as a way of giving chance to the proliferation of new markets which would be formed from the new increased client base.
This merger was therefore thought to be a very convenient deal that would create an opportunity for HP to expand its market by utilizing the new markets that would be found by the inclusion of Compaq in their business portfolio. In addition, Compaq was viewed as a powerful brand competitor since it was already regarded as a brand reference in the industry. Consequently, this merger was a proper way of leveraging the HP Company from the extreme competition that is prevalent in the IT industry coupled by constant advancement and development of new products due to the increased technology use. Hence, this strategy would also improve the brand product of the company thus ensuring that the company would actively compete against their major rivals in the industry . However, the company was also hoping to improve its product portfolio by including the diverse products from Compaq in their product collection. This would therefore, increase the company’s production thus expanding its gross revenue. In a nutshell, the strategy adopted by HP in merging with Compaq was a very convenient plan regarding the fact that HP was seeking to improve its market share in the industry and yet Compaq was a suitable candidate to fill this existing gap (Miller, 2008).
One public corporation that has not participated in a merger is Walmart Inc which is a large multinational company that operates big discount chain stores. However, the company has not been able to undertake mergers and acquisitions given the diverse product from various companies that the company offers in their chain stores. As a result, one of the best candidates that would easily merge with Walmart and become a powerful company is Starbucks Company. Starbucks deals with beverages and drinks, with its main specialty brand being coffee which is sold in all Walmart stores. Hence, this business partner of the company would be suitable to merge with Walmart due to the various business relations that they have had as well as the product compatibility that exists between the two companies. Foremost, Walmart has already captured a very huge market share in the chain stores sector and thus this would offer a very lucrative chance for Starbucks to take this strength that is possessed by Walmart. As a result, Starbucks would enjoy the benefit of marketing from Walmart which is a multinational company. This would therefore help the company to pursue the global market which it has not efficiently utilized in its present business prospects. This merger would greatly be important in improving the product awareness of Starbucks brands in a global perspective therefore assuring the company of increased market share and product sales.
Furthermore, Walmart products would get a chance to occupy more space in the Walmart chain store hence improving its production which would consequently result to improved performance and productivity. The beverage sector is a highly competitive industry due to the fact that they produce fast moving consumer goods which thus pose as a potential threat to the company. However, having the benefit of being marketed by Walmart would put the company at a better position away from the market competition in the sector. Consequently, the merger would also be a breakthrough for Starbucks value chain due to the fact that Walmart would offer a good distribution mechanism to help the company capture many marketplaces as possible (Sherman & Hart, 2006). It is also prudent to note that the distribution mechanism to be offered by Walmart would be efficient in utilizing globalization due to the fact that Walmart operates as an international company. This strategy would also be beneficial to Walmart Company in various ways. Firstly, the company would have assured stock of the Starbucks product hence increasing their asset base. Furthermore, the company would also capture the client base owned by Starbucks thereby improving its market share due to the shift of clients from Starbucks. Hence, a merger of Walmart and Starbucks would offer great benefits for both companies hence improving their overall performance in the market.
HP Company which operates internationally has various international business level strategies that are aimed at propelling the company into greater heights in the information technology industry. The findings from the study into this company reveal that the adopted international business level strategies are directed at improving service delivery, competitiveness and customer satisfaction for the company (Arino, 2004). Conversely, the choice of international business level strategies is actively guided by the company’s existing capabilities which would effectively be helpful in executing the set strategies. Hence, these business strategies have facilitated the company in becoming extremely profitable thereby earning more income to its shareholders. The international business level strategies adopted by HP are mainly in the areas of leadership, market positioning and employee retention. To begin with, the company adopts a business strategy that aims at ensuring that the company develops an innovative leadership that would be significant in ensuring increased company efficiency. The company recognizes that leadership forms a vital part in the company’s ability to perform well given that great leaders motivate their employees hence improving their performance and that of the company. It is believed that innovative leadership would be effective in ensuring that leaders maintain close relations with employees and also make it certain that these leaders would offer the relevant support to the workforce.
Hence, this would consequently promote employee job satisfaction and thus ensure that employees put more efforts in their work and hence improving the overall company performance (Rugman & Collinson, 2009). This strategy also helps the company in attaining a higher rate of employee retention which is very important for the company. Secondly, the company also embraces the strategy of market positioning in the marketplace so as to secure a higher market share. This strategy is backed up by the level of professionalism that the company adheres to through the recruitment of high quality personnel. The company undertakes market positioning so as to cushion itself against the extreme level of competition that exists in the market. Market positioning is achieved by ensuring that the company increases the production of products sought by the clients as well as constantly improving its products to suit the improved technology in the world. Lastly, the company seeks to ensure employee retention so as to make it certain that they maintain a good level of competence. This is also helpful in ensuring that the company would have a maintained high performance which is sustained by the skillful efforts of their proficient workforce.
Consequently, the company undertakes various international corporate level strategies so as to maintain the higher performance which continues to be recorded by Hewlett Packard. Foremost, the company has been involved in constant market segmentation and also creating a target market for its products. This has been the strategy behind the stable market share that is experienced by HP. Thus, this strategy helps the company in securing more clients in the market and also keeping up with higher levels of competition in the industry. Secondly, the company also undertakes the international corporate policy of ensuring customer satisfaction as well as client retention (Furrer, 2011). This is seen as a vital strategy of maintaining the company’s market share as well as the continued high performance by the company. Customer satisfaction is achieved by the fact that the company emphasizes on high quality in the development of their products as well as enhanced service delivery to satisfy the customer. Lastly, the company also undertakes performance evaluation of their employees as one of its international corporate level strategies. This is viewed as a policy that would be useful in ensuring that the company achieves its set organizational goals and objectives by ensuring that the employees perform to their potential.
Thus, the company undertakes performance measurement routinely to check if the performance of their workforce is as it is anticipated by the company. Starbucks would consider adopting different business level strategies and corporate level strategies which would be helpful in improving their organizational performance. One business level strategy that would be adopted by the company would be improving its market positioning the beverage sector. The beverage sector is characterized by a variety of firms who continue to present high competition to Starbucks and hence the company would counter this high competition through an informed market positioning. This would help the company in improving its client base as well as expanding its market by positioning itself in new markets thus accruing more customers. Consequently, one corporate level strategy that the company would consider adopting in its business operation is ensuring customer satisfaction as well as customer retention (Arino, 2004). This would be important for the company by ensuring that they maintain an acceptable level of the market share which would be significant in enhancing the achievement of its organizational goals and objectives. This strategy would also be effective in improving the level of sales for the company hence improving its profitability and performance in the beverage industry.
References
Arino, A., Ghemawat, P., & Ricard, J. (2004). Creating value through international strategy. NY: Palgrave Macmillan.
Furrer, O. (2011). Corporate level strategy: Theory and applications. UK: Routledge.
Kaplan, S. N. (2000). Mergers and productivity. Chicago: University of Chicago Press.
Miller, E. L. (2008). Mergers and acquisitions: A step-by-step legal and practical guide. N.J: Wiley.
Rugman, A., & Collinson, S. (2009). International business. England: Prentice Hall Financial Times.
Sherman, A., & Hart, M. (2006). Mergers & acquisitions from A to Z. NY: AMACOM.
