King & Schriber (2016) Flashcards
(6 cards)
competitive responses to acquisitions
Acquisitions can impact the risk of competitor retaliation.
- Improvement of acquisition performance; Best time to attack a competitor is when they are busy with an acquisition
When does retaliation happen?
Acquisitions is a form of response to rival firms’ competitive acquisitions
Retaliation happens as companies feel threatened
Companies invest in RD while competitors are busy with M&A
Competitive perspective acquisitions
a) Awareness, the more visible an acquisition is, the more likely competitive response
b) Motivation, motivation of competitors to respond, high impact is high response
c) Capability, willingness/confidence to respond, more time integrating is more response
Integration of competitive dynamics:
- Relevant to acquisitions, vulnerable to retaliations thus competitors react to make it more difficult to integrate
- Asses risk profiles, assessing competitors capability and confidence to react can help understand and capture value
Migrating competitive responses (BEFORE)
- Confidentially – Awareness (before), make it as secret as possible
o Deception, faster completion, blend moves (multiple smaller) - Growing industries – Motivation (before)
o Larger industries lessen competitor concern, target growing fragmented industries, or target asymmetric acquisition to less vulnerable - Early acquisitions – Capability (before) the earlier the better
o Toe hold investments, start with smaller investments then go further
o Friendly deals are better
Migrating competitive responses (AFTER)
- Information management – Awareness (after), limit information
- Portfolio acquisitions – Motivation (after), smaller steps over time are less risk, easy
- Build capabilities - Capability (after),
o More experienced = better response
o More capable acquirer = quick deal
o Faster integrations = less disruption
o Include routines to respond
