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Strategic Management: Killing Competitors Through Acquisition

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Strategy and Strategic Management

Strategy and planning are used interchangeably by many authors. The main difference between a strategy when compared to planning is that it takes specific measures and policies to develop robust resources that can lead to sustained development and such a development is in line with the changes in the macroenvironment and the stakeholder’s demands and changes in expectations (Finlay, 2000; Hill and Jones, 2012). As far as the retail industry is concerned, one common feature shared by companies in the last many years is the pressure on a strategy to reduce prices, which to a considerable extent is driven by competition. A major strategy is to kill this competition through acquisition. The acquisition is one of the major growth strategies (Smit, 2001), and the parent company, the Aditya Birla Group also pursues this strategy, and this is how Vodafone and Idea have become part of the group.

One of the main advantages of this growth strategy is that it can acquire the resources and market and there could be only some issues that may be needed to be managed (Smit, 2001). However, the majority of acquisitions fail and reduce the market value of companies. This is particularly the case of companies that try acquisition as a diversification strategy to reduce risk (Schraeder and Self, 2003). A company that has successfully pursued acquisition as a growth strategy is Procter and Gamble (Marketing Week, 2007; Weston, 2001).

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Strategy and Structure

While pursuing a strategy, an internal environment of a company must support the development of key resources in a timely manner if the planned strategy is adopted. If the emerging strategy is adopted, then it must have a structure that acts as an instrument or glue offering cohesion between the different elements of that company (Farjoun, 2002; Mintzberg et al., 2009) in a manner that allows quick responses to the changes in the macro-environment. Planned strategy to a considerable extent is possible with Company as it is in retailing and the amount of differentiating that can be achieved is relatively low. Nonetheless, product line differentiation is something that Company can follow (Avenel and Caprice, 2006). It is not just the planned and emergent strategies (Mintzberg et al., 2009) that companies follow but also some companies tend to pay great attention to innovation by keeping consumers at the heart of their product development process. Thus, they keep on delivering innovative products and one such company is Amazon which introduced Kindle Publishing, Prime, etc.

The relevance of strategic management models becomes explicit at various stages of strategy development. In internal environment analysis, SWOT analysis is useful because for Company, even though it has strengths such as having the presence of great brands, it may need to assess its strengths and weaknesses (none as such) against opportunities and threats. Then only resource development can fulfill its purpose. Besides this, in resource development, the nature of competitive forces must be considered (Porter, 2004). Newmarket growth strategies can be a major area of attention of a Company with its growth and Segmentation, Targeting, and Positioning along with the possibilities of Export, Joint venture, or greenfield investment can be assessed. Further, the Ansoff matrix can be applied for determining the growth strategy (Johnson et al., 2017).

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Strategic Management: Killing Competitors Through Acquisition. (2021, July 30). Edubirdie. Retrieved September 30, 2022, from https://edubirdie.com/examples/strategic-management-killing-competitors-through-acquisition/
“Strategic Management: Killing Competitors Through Acquisition.” Edubirdie, 30 Jul. 2021, edubirdie.com/examples/strategic-management-killing-competitors-through-acquisition/
Strategic Management: Killing Competitors Through Acquisition. [online]. Available at: <https://edubirdie.com/examples/strategic-management-killing-competitors-through-acquisition/> [Accessed 30 Sept. 2022].
Strategic Management: Killing Competitors Through Acquisition [Internet]. Edubirdie. 2021 Jul 30 [cited 2022 Sept 30]. Available from: https://edubirdie.com/examples/strategic-management-killing-competitors-through-acquisition/
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