According to many types of research, the base of Merger & Acquisitions is on strategic and financial motives with the goal of creating value that will not emerge or come out if two companies started to act individually (Bower, 2001; McCarthy & Dolfsma, 2013; Schweiger & Very, 2003; Seth, Song, & Pettit, 2000). Hitt, Hokisson, Duane and Harrison stated in (2001) that synergy is the essence of value creation. Hence, it is essential for the acquiring companies to recognize factors for creation of synergy while looking for acquisition objects. Jameson and Haspeslagh (2006a) came to know that synergies basically depend on organizational and strategic fit between acquiring organization and acquiring company. Reasons for the acquisitions are the aim of reaching the new markets, increasing the efficiency of present resources or gaining the new resources (Bower, 2001; Haspeslagh & Jemison, 1991; Hubbard, 2001; Schweiger & Very, 2003).

Bower (2001) made outlines different activities of strategies that he proposed as the basis for the engagement of companies in mergers and acquisitions. The 5 strategies which he identified were:

The geographic roll-up M&A
The overcapacity M&A
The M&A as R&D
The market or product extension M&A
The convergence of industry M&A

The extended explanation of these objectives came in 2001 from Hubbard which related strategic motives to strengthened position of the market and future growth. The objectives of acquisition were sorted further into 6 categories:

Market penetration
Financial synergies
Vertical expansion
Horizontal acquisition / Synergy or asset potential
Market entry
Economies of scale

Very and Schweiger took a similar approach in 2003 to objectives for the undertaking acquisition that, combined with the explanation of Hubbard (2001), gave rise following description in acquisition objectives:

The meaning of market penetration is the acquisition that is made with the intent of gaining market share and market power. Financial synergies do come from acquisitions that are made with the intent of improving earnings through enhanced facility ownership, enhanced terms of finance, and accounting variations. Vertical Integration means acquisitions that are made with the intent to enhance control over the resources, the distribution channels, or technology by the acquiring companies which have similar characteristics. Horizontal acquisitions which are also known as asset potential are made with the intent of optimizing the use of assets of the acquired company. Market entry acquisitions are developed to enter new regions, industries or unrelated or related markets for enhancing market coverage. Economies of scale mean acquisitions with the intent of integrating fragments or entire acquired companies for optimizing the earning abilities (Hubbard, 2001; Schweiger & Very, 2003).

The Process of Acquisition

The acquisition value depends on the ability of management to deal acquisition process regardless of strategic objectives which an organization has (Cartwright & Schoenberg, 2006; Gomes et al., 2013; Haspeslagh & Jemison, 1991 and; Jemison & Sitkin, 2006b). The theory of acquisition process mainly throws light on process of acquisition. It proposes that final acquisition outcome is determined by factors and activities in acquisition process (Jemison & Sitkin, 2006b). Moreover, acquisition process is used for understanding of creating the value in acquisition instead of determining company value (Haspeslagh & Jemison, 1991).

The process of acquisition is seen basically as two underlying major sub processes, that are pre-acquisition and post-acquisition process (Gomes et al., 2013; Lasserre, 2003; Hubbard, 2001; Haspeslagh & Jemison, 1991 and; Jemison & Sitkin 2006b). Pre-acquisition process consists of decision-making issues with regard to acquisition, that includes rationales for justified acquisition like analyzing, screening and strategically evaluating prospects of acquisition (Haspeslagh & Jemison, 1991). Post-acquisition process contains implementation phase of acquired company like products, cultures, values and integrating processes which are the capabilities that play part to value of acquisition (Haspeslagh & Jemison, 1991; Pablo et al., 1996).

Haspeslagh and Jemison (1991) came to know the perspective of acquisition process in 1991 that was being explained by researchers through decades. It is a linear process that starts with pre-acquisition and ends in the post-acquisition process. (See Figure Summarized Acquisition process model adapted from Haspeslagh and Jemison (1991), Lasserre (2003), and Gomes et al., (2013).

The process of pre-acquisition is described by a set of the strategic motives for undertaking acquisition and evaluation of various targets of acquisition to notice which target creates good synergies for the acquirer (Hubbard, 2001; Lasserre, 2003). Mainly, the process is evaluated by a strategic fit which is the identification of the contribution that an acquisition makes and after that it determines if the proposed target of acquisition fulfills strategic contributions. For example, in the terms of products or new customers which contribute to an increase in non-financial or financial goals (Jemison and Sitkin, 2006b).

Organizational fit mainly is being used to a lower extent for the identification of possible problems which can lead to interruption in process of value creation (Bing and Wingrove, 2012). The process of post-acquisition is characterized by an integration of the acquired company and transition to new standards and cultures too as a business operation that is supposed to produce enhanced value is transferred (Lasserre, 2003). This process takes into consideration the organizational fit as organizational differences sometimes cause issues that lessen the probability of succeeding with extracting operational and financial gains (Gomes et al., 2013). The other aspect in which the acquiring organization sometimes faces problems is a willingness to do fast or quick endorsement of the acquisition process. So, the chance of ignoring important organizational fit and strategic issues is more and it can disturb the transition from two individual entities into one acquisition (Gomes et al., 2013; Jemison and Sitkin, 2006a).

Mergers And Acquisitions – Fact-Based Decision Making

Mergers and Acquisitions have become an integral part of the corporate strategy which is a combination of the buying and selling of business corporations or assets with the aim of promoting the growth of the business in its respective sector. The amalgamation of two corporations can result in increased financial power, business activity as well as market share (). In addition to this, this offers opportunities to synergize through efficiencies gained by economies of scale. According to the figures released by Statista (2017) the total value of international M&A deals amounts to approximately 4.74 trillion U.S. dollars however, the rate of merger and acquisition failures is somewhere between 70% to 90% (Statista, 2017).

The primary cause of this rate of failure are varied however, it will not be unfair to say that the entire failure of the deal starts with flawed decision-making criteria. In simple terms, a haphazard process of decision-making tends to generate haphazard results. When a haphazard decision-making process is involved in the target screening and selection process it will definitely result in a failure. Moreover, this result can have a long-lasting and detrimental impact on the acquirer. Having the fact that mergers and acquisitions will increase in the next few years, most businesses are moving toward eradicating haphazard decision-making processes from their M&A approach so as to improve the overall M&A decisions.

Decision Models For Target Screening Process

The task of screening as well as management of target companies is a very classic challenge of portfolio management.it involves considering various factors, the alternatives for evaluation along with the decisions that should be made. Emphasis should be on over-analyzing available data along with engaging all internal stakeholders for leveraging their insights, experiences and decisions. This situation can be best controlled by developing one or more decision models so as to enable a multi-criterion decision-making process. Decision models comprise of goals, measures, weighted criteria along with an associated rating scales. These models help decision-makers to consistently and comprehensively evaluate and rate the value of the business of the alternatives that effectively contribute toward the decision objective (Sahu et al., 2013).

Decision models offer distinct advantages which include:

Assuring a comprehensive analysis of every possible alternative
Balancing of multiple qualitative and quantitative factors
Improved justification for business decisions
Promoting cost vs. benefits assessment
Enabling fast reprioritization in response to the ever-changing business conditions.

Methods Of Target Screening

Criteria for evaluating potential and screening acquisition targets present the benchmarks against that for the evaluation of a company (Srivastava and Datta, 2002). In this part overview of the strategic financial, industry, organizational and business environment related decision criteria which is used by the corporates acquirers in process of selection of candidate.

Strategic Decision Criteria

The main aim of strategic screening is to search whether characteristics of target match with objectives of acquisition of acquirer and whether there are strategic risks linked with firm (Becker, 2016, p. 303). In strategic screening, decision makers have a look whether any of potential synergistic gains have chance to be realized (Eschen and Bresser, 2005; Jemison and Sitkin, 1986).

Criteria of strategic decision implemented by decision makers during strategic screening process are usually derived from acquisition strategy (Lucks and Meckl, 2015, p. 123) and capture that which of the “white spots” in firm’s strategic positioning must be closed with acquisition (Becker, 2016, p. 302). These gaps of strategies may link to dimensions like product portfolio, market shares, customer segment, business or technology models and geographical markets (Becker, 2016, p. 302). Therefore, it relates to target characteristics which determine whether “strategic fit” is found between acquirer and the target. Strategic fit can be defined as degree to that target company complements or augments parent’s strategy and by doing so makes known contributions to both financial as well as non-financial goals of the parent company (Bettinazzi and Zollo, 2017;). The main argument of discussion is the loss or gain from acquisition are dependent on strategic fit between acquiring company and target (Lubatkin, 2003). The higher is the probability of a strategic fit of the acquirer and the target, the more gains can be expected from the deal (Calipha et al., 2010). The table given below provides an overview of the literature on criteria of strategic decision.

Organizational Decision Criteria

On one hand, this criterion relates to the concept of the organizational fit while on the other hand it relates to the characteristics describing capabilities of target and resources which can be considered important for the acquirer. Scholars have evaluated organizational fit in the terms of the various dimensions. For example, these include the Top Management Team compatibility in the terms of cultural differences among top management teams (Chatterjee et al., 2007; Datta, 2002), the fit similarity or compatibility of the management style (Larsson and Finkelstein, 2010; Rao et al., 1991), various functional backgrounds (Haspeslagh and Jemison, 1991; Krishnan et al., 2007; Wiersema and Bantel, 2002) control and reward system (Datta, 2002). Moreover, Dollinger and Saxton have operationalized the organizational fit as scale which reflects similarities in information system, human resources, organizational structure, culture among two companies and information and accounting system. A dimension which is discussed very frequently of organizational fit concept in both M&A literature as well as amongst practitioners, is cultural compatibility, cultural fit or degree of relatedness of culture among acquirer and target in the terms of national and organizational cultures (Ahammad and Glaister, 2013; Bauer et al., 2016; Marks and Mirvis, 2001; Stahl and Voigt, 2008; Tarba et al., 2017; Weber, 2018).

Second, the firms engage in the acquisition to reach critical resources of organization which can be valuable and which may be particularly lacking (Granata and Chirico, 2010). These resources can be tangible (e.g., physical and final assets) and intangible (capabilities of TMT, corporate reputation, human capitals and brands). Prior research of M&A suggests that comprehensive screening of target acquisition and the evaluation process should include assessment of target’s both tangible as well as intangible resources and assets (Harvey and Lusch, 1995; Hitt and Pisano, 2003). It is for this purpose that the resource-based view of firm gives suitable perspective for investigating the acquirer’s target screening processes. It is because the profile of target can be regarded as the combination of intangible and tangible resources. Specifically, during organizational screening, the acquirer commonly investigates the firm specific capabilities and knowledge like market, industry, production, technical know-how (Hitt et al., 2000) and R&D, which are important competitive assets that the firm has (Grant, 1996). This type of firm specific knowledge is often found in human capital, in particular firm’s TMT and the senior managers. Henceforth, organizational screening involves the evaluation of target’s capabilities of the top managers and key executives (Hitt et al., 2000; Kiessling and Harvey, 2006; Marks and Mirvis, 2001). Most of the times, the top manager’s implicit knowledge about the industry, the corporate strategy along with the strengths and weaknesses of the organization along with maintaining of interpersonal networks of external and internal relationship which is very crucial for the business activities (Kiessling et al., 2008; Kiessling and Harvey, 2008). Further, information-based assets and resources which are sometimes evaluated in the corporate acquisitions are the intellectual brands, the reputation of target among customers or suppliers and property rights (Capron and Shen, 2007; Hitt et al., 2000; Hitt and Pisano, 2003; Kiessling and Harvey, 2006; Mahajan et al., 2014; Rao et al., 1991; Saxton and Dollinger, 2004).

Financial Decision Criteria

This is the third step in evaluation of “financial fit”. In early pre acquisition screening, financial fit’s assessment does not include the detailed valuation of company and assessment of the thing whether expected price of purchase lies below or above this value (Lucks and Meckl, 2015, p. 128). Financial screening on this stage consists of initial assessment of transaction’s financial feasibility and evaluation of consequences which are possible for annual profit and other main performance indicators like debt ratio or profit per share (Becker, 2016, p. 303; Lucks and Meckl, 2015, p. 128). Decision makers can easily have a rough estimate about deal’s affordability by calculating price range for expected price of acquisition. It is done by usage of valuation multiples like EBIT(DA) of the companies in close group of them (Lucks and Meckl, 2015, p. 128). The acquiring firm can get some useful ideas about the acquisition premium by determining expected price range of acquisition. It tells about how much the acquisition is ready to pay for target firm (Laamanen, 2007; Reuer et al., 2012). It also includes assessment of financial situation by the study of historical statement of income of target. It can also be done by studying the financial forecasts and balance sheet. By using the data available at this point, the decision makers evaluate and calculate the key performance and its range (Henn et al., 2018; Hitt et al., 2000; Hitt and Tyler, 1991; Kim and Finkelstein, 2009; Very and Schweiger, 2001, p. 13). With help of balance sheet products, financial analysis includes consideration of target’s intangible (like brands, patent, reputation, human capital) and tangible assets (like financial and physical) and liabilities (Kiessling and Harvey, 2008). Accounting valuation can differ in different regions because of unsafe conditions (Harvey and Lusch, 1999). Financial assessments can provide the foundation for making of forecasts on cost, future revenues, profit scenarios for target and financing requirements (Harvey and Lusch, 1995; Very and Schweiger, 2001).

Decision criteria for evaluation of industry and business environment

This is the final step in process of target screening. Prior researches have shown that the attractiveness of company is determined usually by industry’s structural effectiveness and competitive strength within its industry (Porter, 2008). Scholars have therefor suggested that screening activity must incorporate assessment in terms of dimensions (Rajagopalan et al., 2013). Resources of firm depends on environment type of industry where resources are usually employed (Heeley et al., 2006). Environmental factors can have an impact on the value and performance of firm. PEST analysis includes thorough and rigorous environmental screening with four dimensions: economic, socio-cultural, political and technological aspects (Gupta, 2013; Sammut-Bonnici and Galea, 2015). PEST analysis can guide environmental assessment and support acquirers. This type of analysis is important for cross-border deals or transactions. When assessing the potential target of acquisition, the acquirers should look at industry context too (Anand, 2005; Anand and Delios, 2002; Bauer and Matzler, 2014). Normally, attractiveness of industry in which target operates actually depends on structure of industry (Porter, 2008), which on other hand, drives the competition among firms (Porter, 2008). Five forces model is important for attractiveness of industry (Porter, 2008). This model involves qualitative and quantitative assessment of other competitors and direct competitors force stemming from suppliers, new industry, substitute products and customers. According to literature, two common quantitative measures are average profitability and growth of industry (Dawson, 2011). It is important to consider the industry’s growth because it can allow the ability of target to increase the revenues in future (Wright et al., 2001).

Candidate Selection

When you come to know that one company is acquiring other, it sounds like the process is done in a blink of eye. You hear about the merging of two companies for example ABC Co. has announced the plan to merge with or acquire XYZ Corp for $20M stock and then occurs the transaction and you think “this is what I heard about and they were doing it”.

But in actual the process of acquisition is longer than the blink of eye. You will notice that whenever there is a news about acquisition, there is always a word used “plan”. It is because a lot of hard work is done in process to bring this so far. The critical steps involved in planning process of the target screening.

Creation of Acquisition Strategy

Acquiring companies which are very successful are pro-active. They are not waiting for some bankers for investment deals, instead, they have acquirers as hunters. Acquiring companies are actually keen hunters, they are passionate about the acquiring targets. In the start, they need to identify the potential targets which make sense overall business goals of company (Canila, 2009).

The companies don’t merge or acquire company because of acquiring purpose. Instead, they look for places where chances of success are high. They go with the theory of economic function of acquisition, reason of business transaction and relationship resulted between merging entities. As a result, acquisition strategy is created where assiduity has identified most promising segment of market for growth and points out financial and commercial hurdles for the potential deals. An acquisition thus can result into new market exposure, growth, enhanced efficiencies by addition of more synergies and growth. To do it all, acquisition team should know about the strategy, profile of acquisition target and their company inside and out (Chen and Liang, 2011).

Forming List of the Potential Target

When the clear and clean acquisition strategy is ready, next important step in process of planning is to form a list of those companies which are potential target. Acquiring company should select industry or company it is targeting and then compile list of those companies which match to their acquisition strategy to some extent (DePamphilis, 2010).

Refining Criteria of Your Target

Development in target list goes on with increased number of information lists of the targets. It can come from working with M&A experts, market, institutional learning and research in market segment where the acquisitions can create value. They will find potential segment and perform complete examination of value chain of industry and ecosystem. By this research, it is easy to identify potential sources of profit with disruptive and emerging technologies, important part of competitive advantage and customer buying pattern. Once, the initial list is developed, then they will refine list by setting criteria for the target companies. By doing so, initial list is developed which is based on descriptive screening criteria (Gaughan, 2010).

Target Prioritization

When the initial list of the potential targets is formed by screening criteria, then acquisition team of company can reduce list to further those potential targets who are at priority. Availability of assets in market, potential for the value creating synergies and parenting strategy are basis for culling of potential targets to categorized list (Gomes et al., 2013).

Target Evaluation

With refined lists of the targets, acquiring company contacts with sellers. Maximum work on this stage is about to gather data about potential target and data should be maximum. If the acquiring company fails to do so, then it will have to make request to target for initial data. This information can help the acquiring company to know that either forward motion in M&A process is good from both points i.e., financial and strategic standpoint. Due diligence on this point in target screening process appears to be quite critical. Formation of the acquisition strategy is critical step for acquisition process. Explaining detailed criteria to the screen- potential target can become point where acquiring company is sure about its choice (Kim et al., 2011).

Strategic Match Analysis is primary for M&A Analysis

M&A are probably driven over considerations of being strategically fit. Both the qualitative and quantitative factors can be closely considered with the screening process based upon the strategic fit aspects. Those targets that pass from the initial as well as subsequent evaluations and filters needs to be compared as well as prioritized based upon a consistent criterion. A good example can be the development of a strategic fit assessment matrix. This matrix can comprise of assessing the competitive position of the target including competitor retaliation, distribution channels and the risk associated with substitutes along with the power relation with the suppliers including supply chain, economies of scale and supply contingencies and proposition to buyers including pricing, quality and portfolio (Holland et al., 2003).

Apart from a strategic fit, companies that were selected in the target screening process should be supported through profiles so as to better evaluate and assess their potential of value integration.

The profiles need to incorporate product lines, and business segment, manufacturing sites, manufacturing sites and recovery, recent company news, selected history of transactions as well a potential risk.

Whilst the fact that investigation of every target firm fits within the acquisition strategy of the company, it still holds key importance in the screening and selection process. Screening targets for assessing strategic fit also involves avoiding any issues or potential pitfalls at an earlier stage, prior to having a huge amount of money and time involved.

When strategically fit companies have been screened down, the list of options that are viable for the deal is further reduced. This is the time when more in-depth value-analysis can be applied: a typical way pf assessing the strategic fit of a target company include:

Application of subjective screens inclusive of various challenges like integration challenges, product for, etc.
Determining how each target will effectively contribute towards M&A strategy.
Identification of unique challenges as well as red flag s for every target and potential acquisition.

Target Screening Process

Step 1: Figure out where to play

Many organizations consider M&A as a beneficial opportunity for the business. They do so when there is an attractive target or when they are mentally prepared to increase the cash available to them (Christensen et al., 2011). But value cannot be created by using acquisition opportunistically. Finding the right target for acquisition has no shortcuts. Using a comprehensive method for acquisition tells about where to look for the target in first place. It is called “where to play”. It is not right to see the reviews of good candidates directly. Instead, there is a whole process which starts with exploration of industry ecosystem. It means the environment in that acquirer works and interacts with customers, suppliers and partners. Then, there is analysis of potential-opportunity portion or segment. It means the segment where there are attractive companies to purchase. It ends with long list where there is a long list of potential candidates (Haberberg and Rieple, 2008).

Analyzing Industry Ecosystem

The underlying reason is to challenge the acquirer to create a defensible rationale of acquisition. The business should be able to explain that how this deal will proceed and it will create good value. Whether the purchase will be helpful for the core growth of acquirer or not. Will there be any change in technology, will it prove a game changer and will it be attractive for customers? It should properly tell that how acquisition will help to strengthen position of acquirer and create nice value for all shareholders.

This stage does not only look at the recent factors which will influence industry but it also looks at the future progress of industry in future. For example, in the retail sector, analysis can consider the speed of recent multichannel sales-activities along with determining the new waves of mechanization which will be there in future such as grocery will be delivered by drones (King et al., 2008).

Defining Opportunity Segments

After the identification of the generic industry sectors, the next step is the identification of opportunity segments which are specific. For every search direction, we have summarized the results of analysis in scoring matrix. It looks at 2 dimensions:

The strategic fit should be strong with acquirer (in the terms of attractiveness of business model, technological suitability and customer perspective)
This segment should be attractive (in the terms of margin potential, competitive intensity and growth).

Those segments which have good scores in both dimensions are opportunity segments.

Creating Long List

Within the opportunity segment, the search starts for the discrete targets. Each potential acquirer may start its search by using SIC codes and databases that are obtained from them. But this search does not throw light on all sides of acquisition universe. Some companies have data or tools to do so. It is not simple to identify target universe. It is done by involving functional experts.

Source: BCG, (2011)

Step 2: Pinpoint Companies of Interest

The previous step helped in identification of relevant industries and this step helps in focusing the specific industries. Now, it is time to mark those companies which are best for the acquisition candidate. It is important to keep in mind that it will not happen in blink of eye but it will take time. Real discipline is required in this process. There is a process called robust gate stage which helps in identification of right companies. At this point, the financial position of the target matters a lot for the acquirer. But sometimes this type of approach may fall short. Strong performers are not always attractive. For sure, the financial strength can be seen acquisition price. Long term success cannot be promised just by having a look at the past performance of company but it is important to have a look at their ability to create value and realize synergies in future. Might possible that a company which is financially distressed blooms by reconstructing efforts of acquirer and then become a good acquisition target. The acquirer can identify the target it must pursue by having a look at two dimensions: strategic fit among potential candidates & acquirer, and feasibility of deal (Bruner, 2004a).

Assessing the strategic fit

It is not about the attractiveness of company but it is about the fit of company. Its suppliers, geographical footprints, set of the customers and operations should be complementary to those of acquirer. It also matters that how much significant cost particular purchase can generate (Collan and Kinnunen, 2009).

Assessing Feasibility of deal

The thing you should know first about company is that it is available or not. Conventional approaches are sometimes not clear and it causes the wastage of time of the acquirer. For assessment of deal feasibility, there are two levels: market intelligence on chance of sale and ownership structure. Ownership structure is first level and it gives important information. For example, it is noticed from history that companies which have shareholders or which have family relations are least interested in opportunities of M&A, while companies which are owned by the financial investors are more interested in this idea. Second level supports first one. Market intelligence process means that company will be first one to know either the target company is interested in M&A or not (Harding et al., 2004).

Source: BCG, (2001)

Financial Performance

Asset’s financial performance is also under consideration in this process. As already described, financial performance is not the key or main criterion for giving priority to target. Financial performance can dictate premium & have effect on acquisition price to some extent. But it cannot be used as distinction between unattractiveness and attractiveness (Smit et al., 2005).

Defining watch list and action list

When you have the score list of every target on basis of deal feasibility, financial performance and strategic fit, then it is easy to choose a target by summarizing the results. If there are some companies which are not on high priority and they are available, then it is not important to pay attention to them. those companies which have strong strategic fit and are on list are divided into two classes.

Action list: It includes companies with good strategic fit & deal feasibility. According to experience, these companies are mostly available for opportunity.
Watch list: It includes companies which have high strategic fit with less deal feasibility. An acquisition on proper time seems difficult. So, it is better to keep them on availability changes.

Source: Krishnamurti and Vishwanath, (2008)

But it is not good to rely on watch list or action list. There should be a proper research for this purpose which can tell either the target is good or not.

Step 3: Prepare for pursuit

By doing all above step, the acquirer can short list some very attractive companies. Now, their M&A team should come in action and start working hard.

Action List

For every action list target, teams must start collecting target’s cost upsides and revenue. The experts have enough experience to do work properly so that much of information can be collected. This information can help team to add shareholder value to potential target. The acquirer team should have a solid reason of buying target so that target can agree with acquirer.

Watch List

There is a process for continuous monitoring of targets that are on this list. This process is established by BCG. These processes are used for many companies. Aim is to have mechanism which can alerts acquirer to anything that can lead to change in the availability. Continuous monitoring is required in this process. To work with them, it is possible to do regular monitoring so that you don’t miss any chance or alert.

Source: Krishnamurti and Vishwanath, (2008)

Step 4: Move forward with due diligence

After moving till Step 3, almost everyone is clear about desired target. But the thing is that only acquirer is not the only who will be interested in acquisition, there will be other options too. And here, due diligence can start.

Due diligence has 4 phases: having a close-up picture of each target’s attractiveness, examination of synergies of potential deal, reviewing feasibility of deal and digging in business plan of target. Even after following the four stages, the due-diligence projects never become same. A well-defined methodology of due diligence, documentation and the standardized processes are applied for giving predictable look and feel to results (Walker, 2000). There are some firms which are providing services and are positioned really well in due diligence to create the value. Their network is present all around the globe and that is why they deserve appreciation. The experts are present which have information about strategies, plans and the conditions. They help the acquirer to get proper information about target. They help to prioritize and identify the key issues which are unique to target by identifying relevant markets of target into all dimensions- the growth drivers, its forecast demand and segmentation logic. The clear picture of target’s environment is built up. The success factors & comparative performance is also kept in front so that it is easier to make decision. Potential of target for value creation is studied briefly and sensitivities are also told. Hence, a close analysis is provided which is helpful for acquirer to assess business case completely. Result is realistic and professional which allows a good decision (Walker, 2000).

Research Methodology

The purpose behind this type of study is to know that how strategic fit & organizational fit and acquisition can be dealt for facilitation of successful acquisition. In this section, the report will seek empirical and theoretical findings and how data have been gathered & then interpreted. Different choices are made during study and they are motivated. In it, case company used in study is described and various interviewees that were interviewed also included.

Research Philosophy

Mayer (2009) said that it is useful to classify the research methods if underlying philosophical assumptions are distinguished that guide the research. He stated that all types of researches whether it is qualitative or quantitative relies on some underlying assumptions. Along with which research is valid and what methods being the appropriate (Myers, 2009, p. 35). Hence, it becomes important to know about these assumptions.

Most famous forms of the research philosophies in management & business disciplines are interpretivism and positivism. In positivism, the assumption is that the reality is an objective and it can be described by the quantifiable characteristics, irrespective of the researcher and the research instruments. In positivism, sometimes theory undergoes tests and then a statement is formed which tries to tell about dependent and independent variables according to researched subject & relationship among them (Myers, 2009).

There is an assumption about access to reality by social structures like instruments, consciousness and language in interpretivism. Within this approach, independent and dependent variables are not specified by researches. Instead of it, they go with interpretation which is done by information what people give them by their experiences. It is very important to understand the context. Generalizations from the subjects which are extracted depends on researcher & method used (Myers, 2009).

The interpretive approach is the author’s choice because characteristics of this study matches with purpose of study that is to see how to handle the strategic fit, organizational fit and acquisition process to get a successful acquisition.

Qualitative and Quantitative Considerations

Quantitative and qualitative are the two different forms of research approach. Qualitative approach is characterized as constructive, inductivistic and inpertivistic whereas, the quantitative approach emphasizes over quantification and is depicted as dedudistic and objectivistic. According to Bryman and Bell (2011) an inductive approach is usually associated with qualitative research whereas, the deductive reasoning can be linked with quantitative research methods. The nature of this study is subjective as a large extent of the research is based upon interviews which associates the research method to be of qualitative nature. However, the method of algorithm-based approach was also constructed which is categorized as the quantitative research method.

Data Collection

According to Carr, Babin, Griffin & Zikmund (2010), there are 2 types of the data collection; primary and secondary data. Secondary data is the data that is assembled & recorded for reasons and prior to than research purpose. Primary data is that that is generated & obtained by researchers for some specific purpose.

Primary Data

The collection of primary data of author consists of the semi structured interviews with the main persons of management at different organizations. The purpose behind this collection was to know how organizational fit, strategic fit and acquisition process can easily be handled for facilitation of successful acquisition.

Qualitative Research

Patton (2002) and Saunders et al., (2009) had an argument that two main methods are present there: qualitative and quantitative. In qualitative method, non-numerical data like interviews or open-ended data is used for creating through by environment studies (Patton, 2002). In quantitative method, statistical or numerical data is used for testing explanations or theories with statistical validation of the hypotheses or questions.

Strategy for case study was presented earlier that how organizational fit, strategic fit and acquisition process can be dealt with facility of successful acquisition. It is aim for qualitative research to collect huge amount of information for research (Patton, 2002; Saunders et al., 2009).

Qualitative method is useful creation of understanding because examination is done with openness, in depth & focus on details (Patton, 2002). Qualitative method is better to use than quantitative method when research is being done with perspective of understanding (Saunders et al., 2009).

In-depth interviews

Method which is used is in-depth interviews. It is for those questions which have open ended character because it provides in depth responses about opinion, knowledge and experiences (Patton, 2002). Yin (2003, p. 89) further said that case study can be done properly when source of information is interview. Exploring questions will be better to ask as they’ll give developed answers (Saunders et al., 2009). Authors do know that it is difficult to analyze the open-ended qualitative questions because there is lack of the standardization (Patton, 2002). Advantage of the understanding phenomenon by respondents POV is argued so that lack of the standardization can overcome and that is why qualitative methods get used (Patton, 2002).

According to Saunders et al., (2009) and Myers (2009), there are 3 kinds of interviews.

Structured Interviews: Interviews where strict, pre formulated and regulated questions are used to make sure the consistency among several interviews.
Semi-Structured Interviews: interviews where some pre formulated questions are used but it offers room to the improvisation for pursuing new inquiry which emerge during interview.
Unstructured Interviews: interviews where no pre formulated questions are used and the interviewee speaks freely by mind.

In this thesis, author selected semi structural interviews according to the Myers (2009) because it is beneficial and it offers room to person for speaking by mind or show some insights.

If you want an honest interview where the purpose can be studied easily then there should be no pressure of time limit (Myers, 2009).

Myers (2009) suggested that the interviews with people who are on different positions should be conducted so that great understanding of phenomenon can be obtained. He also said that open ended questions are preferable because they increase the validity. So, author interviewed 4 people which were on various positions: CEO, the Vice CEO, HR responsible and CFO. But the HR has no influence on process of acquisition and that is why not present in thesis’s findings.

The first participant of the research is working at the position of CEO and started his career in 1997. In 2004 he was Vice President in the company and has been a part of more than 20 acquisitions in executive group.

The second participant is also the CEO and was employed in 2003, he was Vice President in 2008. He has been a part of almost 15 acquisition deals since his career within executive groups.

Another participant is the CFO is controller in an organization since 2003, he joined group of management in 2013. He has been part of more than 20 acquisitions.

Another research participant is an HR management member and is part of management group since 2013. He has not participated in any of acquisition.

During interview, questions were open-ended and semi structured so that the depth of the inquiry can be easy to obtain. There were different devices to record interviews so that there is no technical fault. The interviews are given here:

Interviews with CEO

Location: AB Headquarter, Time: 13.30 – 14.21, January, 2022

Setting: The office of the CEO, together with the HR responsible, quiet surroundings, behind shut doors and no risk for overhearing or interruption.

Immediate impressions of the interview: Openhearted answers to the questions asked, about company culture, structure, acquisition process and the organization’s ways of thinking. A good connection and relationship between the authors and the interviewee were established and a feeling of trust was present, which enabled the authors to gain deeper knowledge.

An additional meeting with the CEO was conducted, since the possibility to get confirmation and additional information arose.

Location: AB Headquarter, Time: 12.50 – 13.07, February – 2022

Setting: Lunchroom with some noise in the surroundings, the two interviewers and the CEO eating lunch together.

Immediate impressions of the interview: Rapid interview, trying to gain as much knowledge as possible over a quick lunch. Since the person has been involved in the acquisitions and knew what we are writing about he could provide us with useful information. Some stress was felt but was understandable; the interview was a reschedule due to unforeseen circum- stances for the CEO.

Interview with CFO

Location: EFG Headquarter, Time: 13.00 – 13.45, February – 2022

Setting: Quiet meeting room with a good setting for a relaxed interview and no risk for overhearing or interruption.

Immediate impressions of the interview: Slow start, required some efforts from the inter- viewers to explain the questions and our intentions. After some minutes of getting into the right context the interview went on in a highly qualitative manner. The interviewee answered the questions with details and good elaborations on the answers. It became evident that he had been a part of many acquisitions as he could develop how they thought and worked in the acquisition processes and how they evaluated the fit.

Interview with Vice CEO

Location: SBS Headquarter, Time: 10.00 – 12.10, March – 2022

Setting: The office of the Vice President, quiet surroundings, behind shut doors and no risk for overhearing or interruption.

Immediate impressions of the interview: This was a very unstructured interview with a lot of explaining through stories and anecdotes. If one question was asked, then the person being interview mentioned a lot and went on with his own thoughts instead of making sure he answered the right questions. A long meeting, which was appreciated by the interviewers, in which detailed information was given due to the fact that the person who was being interviewed had been deeply involved in over 20 acquisitions.

The Vice CEO was Swedish hence the interview was held in Swedish which was translated into English when transcribed. Due to the semi-structured nature of the questions the interviews contained information unrelated to the actual research. As proposed by Saunders et al., (2009) the interviews are not presented to full length but instead the information appropriate for this thesis. This was done to reduce irrelevant data and instead provide the reader relevant information for coming analysis.

The interview material was sorted into a matrix where data from all interview objects were categorized into themes in order to create common frames for the empirical findings. As the interviews were of different characteristics, i.e., in the number of probing questions and the authors need to direct the conversations, the matrix structure enabled the authors to extract similarities in their answers to enhance the empirical uniformity.

Interview themes

Authors have already decided to go with open ended questions which were related to theoretical aspects. Following are questions and themes.

Value Creation

Jemison and Sitkin (2006b), Haspeslagh and Jeminson (1991) and Lasserre (2003) threw light that how much important it is to find the right acquisition target in pre-acquisition part of process. Basis are some specific motives. The questions that were created to theme are given below:

What are your motives for acquisition?
Why do you want to go with acquisition?

Target Selection

It is essential to find a good acquisition target and then evaluation and analysis of target (Haspeslagh & Jemison, 1991; Jemison & Sitkin, 1986b; Lasserre, 2003). Question related to theme are

What is action in pre-acquisition process?
How to look for target of acquisition?

Due Diligence and Valuation

Lasserre (2003) suggests about how important it is to have a look at financial performance of target because it tells about what price of acquisition should be settled down. The information that had been gathered is very useful as it helps in decision making and valuation (Hubbard, 2001). Theme is given below with questions

How determination of value of target organization is done at the company?

Process of due diligence is important because possible best deal is usually pursued here. The analysis of acquisition & searches for synergies are done here. This step is hard and time consuming while no time is used for aspects of soft organization (Bing & Wingrove, 2012). Question related to theme are:

Describe the working of process of due diligence at the organization?

Integration

Integration is part where two companies come in contact with each other. in this step, value creation depends on ability of understanding (Haspeslagh & Jemison, 1991). Question related to theme are:

How integration of acquired companies can be done?
Organization issues, practices, management and cultural considerations

Datta (1991, p. 281) emphasized on influence which organizational fit can have if 2 organizations are at ease after acquisition. Differences in organizational system and management style are important for post-acquisition integration. Question related to theme are

Do you consider process of post-acquisition in pre-acquisition process?

Transition

This phase is linked with emerging problems and uncertainties when acquiring organization is preparing for value creation and capability transfer (Haspeslagh & Jemison, 1991; Lasserre, 2003). Questions related to theme are:

How can you approach transition phase?
What are the important things you need to focus on during transition?

Harrison, et al., (2000) said that the synergy is essence for value creation. So, it is important to recognize synergy creating factors for acquiring organizations while looking for acquisition objects. The acquisition depends upon the way management deals with process of acquisition (Cartwright & Schoenberg, 2006; Gomes et al., 2013; Haspeslagh & Jemison, 1991; Jemison & Sitkin, 2006b). Theme is:

What will be your act in facilitation of synergies which are identified in pre-acquisition process?

Strategic & Organizational Fit

It is important to see the degree to which acquiring organization fits (Haspeslagh & Jemison, 1991; Jemison & Sitkin, 2006b; Lasserre, 2003). Strategic fit means degree to which target firm complements parent’s strategy. It adds value to non financial and financial goals of parent (Jemison & Sitkin, 2006b, p. 146). Jemison and Sitkin (2006b). So, theme is

What are roles of fit in pre-acquisition process?
How identification of strategic and organizational contribution is done?
Tell about objectives you are looking for?

Quantitative Research

Because of the economic significance of the ability to anticipate corporate mergers and acquisitions, this domain ahs managed to attract considerable attention towards research aspects. There have been applied a wide range of methodological approaches so as to uncover the common characteristics towards merger targets along with forecasting targets inclusive of univariate analysis (Rege, 1984), MDA (Barnes, 1998 and; Stevens, 1973), probit / logit analysis (Meador et al., 1996, Castagna and Matolcsy, 1985), and multi-layer perceptrons (MLPs) (Cheh et al., 1999). These classification models have exhibited varying degrees of success that ranges from below 50% to around 70% out of sample.

Most of the studies that forecast merger or acquisition targets are heavily relied over company accounting data which is supported by market data like share prices as the modelling input data. Using accounting data has a long foresight in the domains of corporate failures (Altman, 1968 and; Altman, 1993).

Biologically Inspired Algorithms

In the previous decade, the range of computational technologies used by modellers have expanded significantly. With this, there have emerged a series of biologically-inspired methods that have a wide range of classification and prediction problems in business and finance (Brabazon and O’Neill, 2006). This methodology includes genetic algorithms, MLPs (Mitchell, 1996), grammatical evolution (O’Neill and Ryan, 2003) and genetic programming (Koza, 1992).

For this reason, this research applies a self-organizing map (SOM). Up till now, the main applications of SOM have been in the aspect of corporate failure prediction (Serrano-Cina, 1996 and, Kiviluoto and, 1998). No previous application of SOMs for the reason of categorizing corporations as merger and acquisition targets has been noted by the authors. Hence, the aim of the study is to contribute in two ways. The first is the presentation of the description of SOM so as to disseminate knowledge related to this research method. Secondly, to assess the potential of SOM for anticipating whether the companies will be corporate mergers or acquisition targets.

Experimental Approach

Discussed data concludes the outputs obtained from 200 UD firms and is gathered in the time period of 1 January 2000 to the 31^st December 2002. To collect all the needed data, Compustat database was used. Information technology data was taken into account to make sure that all the firms under data collection were free of financial difference (GICS Sector code of 45). Discussed data of 100 US firms (group 1) was gathered successfully (both merging firms and firms which were taken-over) in the above-mentioned time period 2000-2002 while the other 100 US firms data (group 2) was gathered for a separate group and in this group where the included firms were not either taking over their targets or merging in the time period 2000-2002 understudy.

The relation between both groups was made on the basis of merger acquisition year and GICS sector code in such a way that group 1 and group 2 firms were allowed to present in the mentioned time period. Dataset includes test data (50 companies) and randomized data (150 companies) collected over 5 recruits.

Selection of input variables

The review of literature (Belkaoui, 1978, Cheh, 1999, Castagna and Matolcsy, 1985 and; Esphabodi and Esphabodi, 2001) helped in identifying 17 parameters for the initial study process. All of these 17 parameters were based on below given ratio classifications.

Liquidity
Debt
Profitability
Activity / Efficiency
Size
Valuation
Dividend payout
Firm size

In the initial statistical approaches, it was made sure that any variable which is not showing any significant changes in its mean value for both groups is not further included. After initial review, 7 parameters were eliminated and 10 were left included (see table I). These above-mentioned ratios were also studied for the cross-correlation coefficients which led to the elimination of two more ratios (cash/total assets and the growth ratio) due to their relating market/book value ratios and working capital to total assets due to which these two ratios were not included further.

SOM Model Construction

For an SOM classifier development, below given tasks hold prime importance:

Training of the SOM
Determining the clusters on the SOM
Using the SOM to predict out-of-sample

Firstly, normalization was taken into account to deal with possible occurring of different magnitudes in individual data elements.

To obtain SOM, modeler was needed to build many of the map parameters and mapping layer node numbers. Enhanced node quantity results in enhanced details of mapping. In next step, the mapping layer was set at a suitable size of 1000 nodes based on the trial and error process. To obtain the clusters, different clustering algorithms were made use of. In the start, every node was assigned one distinctive cluster. Then in each step, clusters were reduced in number by combining the most relating clusters. The granulity of the modeler and the set parameters play a vital role in deciding how many clusters will be left at the end. Our parameters were designed in a manner to make sure that final clusters will be 7. In next step, these clusters were divided and labelled in merged or non-merged groups by using simple voting mechanism using the state of the training data vectors. To label out of sample data vectors were labelled as clusters while the nearest layer node was kept.

Analysis And Presentation of The Empirical Findings

In this part, empirical findings that are obtained from different interviews are presented & analyzed for sake of easy interpretation. The structure of this chapter is same as that of interview themes and theoretical framework. Acquisition process is not moving from pre-acquisition towards post acquisition.

Qualitative Analysis Results

Pre-Acquisition Process

Value Creation

It is seen from researches that the basis of M&As are strategic and financial motives along with value creation goal. Value creation is not possible if two organizations carry on to work separately (Bower, 2001; McCarthy & Dolfsma, 2013; Schweiger & Very, 2003; Seth et al., 2000). Harrison et al., (2001) said that synergy is essential for creation of value. Lasserre (2003) said that there should be few reasons behind acquisition. There is a need for organizational contributions and analyzing possible strategies which are possible to assess from acquisition (Jemison & Sitkin, 2006b).

During the interview with four people at different positions, it is described that how an organizational strategy can be formed for long term growth by keeping other things in mind too. Vice CEO has said that they want to look for companies which will be of their match (Interviewee 1, 2022-01).

CFO said that there are different motives and they change with strategic conditions. Company has strategy that customer should be close to ITAB and it is essential (Interviewee 3, 2022-03). He also said that there should be a complementary target for acquisition. If a company has nice shop fitting and is competitive but it does not have good lighting, then it is good for value creation to go with a company which has nice lighting business (Interviewee, 7, 2022-03).

Analysis of Value Creation

It is important to see that in what way acquired company can help organization to grow because growth is based on 3 pillars which are geographical spread, concept platform and customer portfolio (Interviewee 2, 2022-04). Lasserre (2003) had also said that value creation is important for acquisition and growth. The analysis of organizational and strategic contribution of businesses relates to what Hubbard (2001) and Sitkin and Jameson (2006b) said. The purpose of acquisition is necessary to understand.

Target Selection

Lasserre (2003) emphasized on finding a target for acquisition that is good for strategy creation and for financial value. Acquiring organization must enlist the benefits & problems or either acquisition is according to justice or not (Lasserre, 2003).

There are some common factors which can help to estimate the organizational and strategic fit (Gomes et al., 2013; Hubbard, 2001; Jemison & Sitkin, 2006b). only two factors which are involved are facilitation of objective of acquisition and creation of understanding (Hubbard, 2001).

The company wants from all acquisitions to cause an increase in growth so that organization can move forward. CEO says that you know really well about us but still we don’t go with acquisition until we are sure that this strategy can cause growth and development (Interviewee 4, 2022-03).

CFO says that we make acquisition with those about whom we are sure that they are right people and they will fit well with us in strategies and mental compatibility. So, it is important to talk to each other to know about each other more by meetings (Interviewee 5, 2022-01).

There are similarities and differences in target organization and acquisition so they should talk about it earlier.

Analysis of Target selection

Lasserre (2003) stated that target should be of good value creation and the organization agrees with it. This is the operational strategy. When it is specified that which company can cause great value creation, then it will look for potential target among all which are available. It prefers to go with those who are clear in their objective and do have nice strategies. Organizational fit is must to examine when potential target organizations come with same strategic fit. In this case, organizational fit can deceive. Flexibility, key personnel and culture also matter. It is exactly what Gomes et al., (2013), Hubbard’s (2001) and Jemison and Sitkin’s (2006b) statement had in common.

The company prefers to know what key personnel in target company works and thinks. It is accomplished through informal and formal meetings, dinners etc.

Valuation and Due Diligence

According to theory of M&A, due diligence has a great role in process of pre acquisition so that best deal can be obtained and possible synergies can be identified by keeping eyes on financial performance (Bing & Wingrove, 2012).

Due diligence of the business is done in process of post-acquisition when acquirer and seller are agreed on deal. Vice CEO says that due diligence is the time taking step and a lot of energy is utilized in this step. So why to complete it in pre-acquisition if both organizations don’t agree later on. Then it is completely time wastage. So, it is good to conduct it in process of post-acquisition when the deal is confirmed and we are able to use our time (Interviewee 3, 2022-02). Jemison and Sitkin (2006b) and Lasserre (2003) threw light on financial valuation’s importance. There should be a set value of price of target.

CEO of AB company says that acquisition is just not opportunity. There are some good things about it and some risks are also there. So, when you are making a deal you should be ready for risks too. if you have thinking that price is bit high but it is acceptable, you are not in position to take all those risks (Interviewee 1, 2022-02).

CFO explains in way that it is essential to understand agenda of company. It is needed to be attentive and it is must to know that sellers want from you and it will help you in negotiation (Interviewee 3, 2022-03).

Analysis of Due diligence and valuation

Lasserre (2003) and Jemison and Sitkin (2006b) stated that the due diligence takes place in pre-acquisition but the CEO thinks on opposite side. The Due diligence is less time taking when it takes place in post-acquisition process. There should be a mutual trust between the acquirer and seller because the information obtained from seller is fundamental. Things will go wrong if the information of seller is wrong or misleading.

Jemison and Sitkin (2006b) and Lasserre (2003) acquisition price comprise of financial values with strategic and organizational fit. It gives business a possibility to see either risk degree and strategic value match with financial valuation. Financial valuation can affect decision that they are in mood of acquisition or not. Acquiring businesses prefers to know the strategies before so that it can become easy to know what they want to do. If the strategic fit is good, then there is less risk and ambiguity. It is important to have understanding with agenda of seller for the organization. Hence, the business can prove to be a right buyer by reaching suitable price and it creates understanding.

Interpretation

The section is dedicated to identify differences between the businesses way of formulating the acquisition procedure with that of the generic theoretical process perspective with the focus over evaluating how the acquisition process is handled for facilitating successful acquisitions.

A study carried out by Gomes et al., (2003) and Lasserre (2003), the acquisition process is the same for from decades. What has been identified by the authors is the potential explanation as to how the acquisition process can be handled in a more efficient manner through three aspects.

Simplification Of the Acquisition Process

The viewpoint of organizational acquisitions can be easily compared with a simple purchase of one item from another. Interviewee 1 states that ‘Sitting down and talking about potential acquisitions, face-to-face discussions with each other, the seller and the buyer and this is how the process should be done’. Businesses prefer not to make the process complicated than this. Previous researchers indicates that the process of acquisition is both time and resource-consuming as per a pre-set pattern. Businesses prefer sticking to a usual approach having same key personnel each time. CEO of businesses mentioned that they have been part of acquisition for more than 10 years which gives additional experience and confidence in acquisition deals.

Conducting of due-diligence in the post-acquisition process

The fact that most companies carry out due diligence in its post-acquisition phase is another aspect which tends to facilitate successful acquisitions (Lasserre, 2003). As per the interview with Vice CEO of AB company, this phase commonly sabotages the acquisition mainly because of the fact that most of the sellers and buyers hesitates in seeking advice from the brokers and auditors when they seek an advantageous deal for the client. Experts involved in the acquisition process considers due-diligence to be a part of post-acquisition process which is the time at which the deal has been agreed upon and contracts have been signed. To get this done, companies, emphasizes over the relationship between the acquirer and the seller and invests in a great deal of effort to determine the motives and agenda of the seller. Through the aim of gaining mutual trust, the dal can be carried on by trusting the information of each other regarding the important aspect of the acquisition process. Many companies also use guarantees in the due-diligence process which makes a deal with the seller without having time consuming and expensive in-depth analysis carried out by different specialists.

Considering organizational fit throughout the entire process

In the theory of acquisition, organizational fit is used for determining whether the target company is a good fit for the acquiring organization and it is not until the phase of post-acquisition where this transition is emphasized on part of the management (Bower, 2001 and; Gomes et al., 2013). According to the analysis of the interviews, authors have determined that businesses consider organizational fit to be a criterion for acquisition in the target selection phase. Unless, a proper fit for the organization is identified, in terms of cultural and managerial values, it is less likely that the acquisition will be conducted. Moreover, depending upon the degree of organizational fit, the business starts considering probable issues that may incur in the pre-acquisition process and highlights various strategies over aligning the deal. Through the identification of factors that may incur issues, businesses prepare over how to foster mutual understanding in the deal.

Quantitative Analysis Results

Table II shows the results of our experiments and the mean classification value of insample (out-of-sample) accuracy of 94.80% (95.20) % is obtained. Press’s Q statistic (Hair, Anderson, Tatham and Black, 1998) was calculated to obtain insample accuracy along with null hypothesis stating that the out-of-sample classification accuracy does not yield a preferred output than the individual output and faces a 5% rejection level.

To check the sensitivity of gathered data and results, node number were changed (between 500 and 2000 nodes), along with the number of clusters (between five and nine clusters) which helped in map detailing. For in and out-of-sample data results, accuracies were undisturbed by changes in clusters or number of nodes.

SOM created clusters were further evaluated for better understanding and the analysis of “typical” ratio analysis of different map clusters was done (Figure 2 illustrates the final SOM corresponding to the third data recut). In Table III, the average value obtained for all the models relative to the merged firms and clusters is given along with non-merged ones. On 3^rd recruit, the SOM gave enhanced in and out of sample accuracy and clusters gave smaller means than the overall data cluster means. The data given in Table I and III, leads to few common conclusions regarding “typical” takeover targets or mergers. It is observed that the target firms have a pattern of less debts, increased liquidity, less profitability and are small as compared to the non-target firms.

Conclusion

There are several researches over mergers and acquisitions as it is very crucial for the success of a business. The research concludes that a successful merger and acquisition deal involves two phases – pre-acquisition and post-acquisition process. However, it has also been identified that the more dynamic a procedure the more is the probability of a successful acquisitions. The overall view of the entire process of merger and acquisition instead of focusing over step-wise progression facilitating the ability of assessing strategic and organizational fit in every phase for enhanced ability so as to reduce the probability of misunderstandings and problems.

Another good way to deal with the acquisition process is to conduct due-diligence in the post-acquisition process. This can be possible when there is a mutual trust between the two parties as the agreement can be created on the words of the seller and can be supported with clauses and guarantees. Additionally, mutual trust is also crucial for understanding what can be acquired along with understanding how a company can be approached in the process of acquisition. Moreover, keeping the pre-acquisition process as concise and efficient is considered to be beneficial as fewer resources will be involved. This can be made possible when the same set of experts are involved in the process which will also augment expertise as well as experience from previous acquisitions.

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April 29, 2022 7 comments

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SWOT Analysis of Jollibee Food | Best Food Online Near You

by Shamsul April 27, 2022

SWOT Analysis of Jollibee Food

Jollibee Food Corporation is a famous fast-food chain. It is a Filipino multinational company. The company was founded by Tony tan Caktiong in 1978. It is headquartered in Jollibee Plaza, Ortigas Center, Pasig, Philippines. The product line of Jollibee is really diverse. They sell pizzas, pastries, coffee, hamburgers, chickens, fries, cakes, dumplings, and other fast-food items. The brand has a strong presence across the world with more than 5900 location points. In 2020, the annual revenue of the brand was 129,313 million Philippine pesos. To date, the company has employed more than 1130 employees to run its operations globally. Let’s read the detailed SWOT analysis of Jollibee Food,

When it comes to the competitors, Jollibee has got some intense competition from Burger King, Chick-fil-A, McDonald’s, Chipotle, Unilever, Nestle, Starbucks, White Castle, In-n-Out Burgers, and the list goes on. Today, we are going to conduct a SWOT analysis of the brand in order to find out its success story. SWOT stands for strengths, weaknesses, opportunities, and threats. Here’s the detailed SWOT analysis of Jollibee Food,

SWOT Analysis of Jollibee Food

Company Name: Jollibee

Founders: Tony Tan Caktiong

Founded: January 28, 1978, Quezon City, Philippines

Headquarters: Pasig, Philippines

Owner or Parent Company: Jollibee Foods Corporation

CEO: Ernesto Tanmantiong (July 1, 2014-)

Type: Food

Sector: Food and Beverages

Tagline: Langhap Sarap!

Unique Selling Proposition: To provide high-quality food, friendly and fast service in a better environment.

Customers: People who want to enjoy some quality fast-food items.

Target Consumers: Middle and upper-middle class.

Revenue: P6.3 billion (2021)

Net Income: P5.9 billion (2021)

Strengths of Jollibee | SWOT Analysis of Jollibee Food

Customer Loyalty:

Jollibee has successfully built a robust database of loyal customers. It is because of its ultimate hard work and dedication. They are providing consistent service to their customers. Their quality of food is still maintained which is its biggest strength.

24 Hours Service:

In the Philippines, Jollibee is one of the few fast-food chains that remain open 24/7 and provide service 24 hours a day. You can visit its outlets anytime to fill your tummy with some delicious food. They are open to customers and serve the best quality food. In order to manage 24/7 operations, they hire employees for different shifts and keep changing them.

Strong Distribution Network:

There is no doubt that Jollibee is one of the largest and most famous fast-food chains in the country. They have more than 750 stores across the country. They make sure that every store has enough food to serve customers. On the other hand, Jollibee has a strong presence in different countries such as Saudi Arabia, United Arab Emirates, Japan, Malaysia, Singapore, Vietnam, USA, Italy, UK, Canada, and others.

High-Quality Food:

When it comes to quality and taste, no one can beat the level of Jollibee. They offer the best quality and tasty food worldwide. Its appetizing and appealing taste is enough to make you a fan of this company. Their recipe is secret and due to this reason, they are offering the same quality food to its customers.

Popular Brand:

The main purpose of the company is to satisfy the taste of users. They are very stick to this purpose and offer high-quality tasty food. Just because of this reason, its brand image is very strong and customers easily recognize the company.

Variety of Products:

The biggest strength of the brand is its extensive variety of food items. They offer cakes, hamburgers, chickens, pizzas, spaghetti, coffee, or you name it. Their recipes are successfully tested and all of their items are tasty.

Strong Brand Value:

The company ranks at the 239^th position in Forbes as the World’s Best Employer (2020). On the other hand, the company has received several achievement awards and recognition from all around the world. So, its brand value is highly robust.

Weaknesses of Jollibee | SWOT Analysis of Jollibee Food

Lack of Technology:

The technology infrastructure at Jollibee stores is still outdated even in this modern and fast-forward world. They are using outdated methods of food cooking. Although their food cooking pattern is good it takes so much time. No one wants to wait so much just for a pizza or a burger. The company is not utilizing the latest technologies, which is its major weakness. They should adopt new technologies to make Jollibee’s operation efficient.

Insufficient Marketing:

When it comes to advertising or marketing, Jollibee does not use broad resources or channels to promote the brand or products. They follow a limited marketing strategy for marketing. Despite the fact that it is a multinational brand, extensive and robust marketing is crucial for staying ahead of the competition. The company should fix this issue as soon as possible.

Pricey Items:

Most of its product line is pricey which can disturb its sale and revenue stream. Some customers are very cautious about pricey food. They prefer affordable prices when they are buying food. There is a chance that they stop buying products from Jollibee because of its premium prices.

Campaigns like “ Say No to Fast-Food”:

These days, people are very conscious about health and food. They do not like unhealthy food especially fast food because it leads to several issues like obesity. Moreover, campaigns like “say no to fast food” can also hurt the business of the company. They can introduce healthy products to attract more customers.

Opportunities for Jollibee | SWOT Analysis of Jollibee Food

Worldwide Expansion:

Some countries like India, Pakistan, Bangladesh, and more are very food-loving. They would love to taste food from Jollibee. It is a big opportunity for the company to expand its global operation in order to increase its market share and reach. It can target several countries for selling its products.

E-commerce:

The recent pandemic has created a bad impact on businesses and companies. It has boosted the trend of online shopping. They love to order food online and free home delivery. It is imperative for Jollibee to adopt the latest technologies so that its customers can order food online and get fast home delivery. They can also tie up with food delivery services.

Innovation of Product:

The taste and quality of food is unbeatable. Jollibee should introduce innovation in its product line by offering diet food, vegan food, and other healthy food options. They should come up with new ideas to target health-conscious customers. It would aid the company to enhance its product line and boost sales.

Threats to Jollibee | SWOT Analysis of Jollibee Food

Diet Trends:

Nowadays, customers have become very careful about their health and food. They are boycotting unhealthy and junk food. Such campaigns or trends can destroy the business performance of the company. Moreover, its competitors are offering more healthy options. It is crucial for Jollibee to introduce a new and healthy product portfolio as soon as possible.

Competitors:

The fast-food chain sector is highly packed with a lot of big names such as Burger King, Starbucks, McDonald’s, Chipotle, and some local names. They have secured a strong market cap in the industry. They are the main competitors of Jollibee and continuously hurting its revenue and profitability. Also, its competitors are using innovative marketing and promotional ideas to attract customers. In the presence of these giants, it is hard for Jollibee to expand.

Covid-19:

Covid-19 has shut down all kinds of gatherings, fun parties, and outdoor activities. Just because of this, the annual revenue and net income of the company have decreased.

Final Thoughts | SWOT Analysis of Jollibee Food

Despite all the weaknesses and threats, Jollibee Food Corporation is one of the most popular and largest fast-food chains in the Philippines. There are some areas such as limited adoption of technology, covid-19, rising competition, and social distancing that should be fixed ASAP. They need to adopt the latest technologies in order to offer food online. On the other hand, they should introduce healthy food items to gain the attention of health-conscious customers. These are some simple ways to expand the business globally and increase the overall profitability and revenue stream of the company in the highly crowded and competitive market.

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April 27, 2022 7 comments

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SWOT Analysis of Lidl | Quality Products at Low Prices

by Shamsul April 27, 2022

SWOT Analysis of Lidl

Lidl Stiftung & Co. KG is a leading retail chain international company. This German company was founded by Josef Schwarz in 1932. The headquarter of Lidl is in Neckarsulm, Germany. Fruits, Vegetables, health and beauty, fresh meat, wine, beer, bakery, baby products, cleaning and household, deluxe, chilled, flower market, and much more are some important products and services of Lidl. In 2020, the annual revenue of the company was 97.8 billion Euros. Lidl plans to achieve a net sale of 130 billion Euros by 2026. Let’s read the SWOT Analysis of Lidl.

The company has got so many competitors like Boots, Aldi, Kroger, Walmart, Carrefour, Woolworth, Walgreens, Ikea, Amazon, Target, Home Depot, eBay, and much more. In this article, we are going to discuss the SWOT analysis of Lidl in detail. It is a proven strategic management tool that helps to identify its strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.

SWOT Analysis of Lidl

Company Name: Lidl Stiftung & Co. KG

Founders: Josef Schwarz

Founded: 1932, Germany

Headquarters: Neckarsulm, Germany

Parent Company: Schwarz Gruppe, Dieter-Schwarz-Stiftung

CEO: Gerd Chrzanowski (Sep 2020-), Ignazio Paterno (Aug 2019-)

Type: Retail Industry

Sector: Lifestyle and Retail

Tagline: Where quality is cheaper

Unique Selling Proposition: The brand offers quality goods at attractive prices.

Customers: Price-sensitive consumers who have a limited budget for shopping.

Target Consumers: Households

Global net sales: (2021) US$ 1,424.0m

Strengths of Lidl | SWOT Analysis of Lidl

Award-Winning Brand:

In Germany, Lidl is an award-winning brand. Its aim is to strengthen the brand’s name and provide high-quality products. In 2020, the company won the Most Reputable Supermarket Award. They have also won the Cheapest Supermarket Award, and the Fresh Flower Retailer Award of the Year (2017). This shows the brand’s strength in the competitive market.

Own-Label Products:

The company provides a huge range of services and products at its outlets. Lidl sells these products under its own brand name or label. It enables the brand to save costs on products and supply chain expenditures. Hence, it reduces manufacturing costs and the company can generate more profits. It will be good for the company’s profitability and market share. The brand also offers various promotional discounts and deals. All these factors have helped Lidl to maintain its prominent position in the market.

Discounts and Deals:

In Germany, the brand is famous for its discounted offers, promotions, and deals. They have achieved the status of a discounted store. That’s why customers love to shop everyday products from the brand. They offer discounts on high-quality and premium products so that everyone can buy them. It reflects the brand’s commitment to the consumers. The company sells both international as well as locally made products. More than 70 percent of the goods that Lidl offers in the United Kingdom market are derived from British traders.

Robust Network:

The brand has a growing and very large network in the United Kingdom. In the UK, they have got 800 stores and 13 distribution centers. They have a network of more than 11000 stores in the UK and Europe. The company has hired more than 315000 employees to date.

Excellent Customer Service:

The company provides high quality and a huge variety of products to the consumers. Its stores or outlets remain open on the weekends and even on Sundays. This kind of excellent customer service forces customers to shop from Lidl stores.

E-commerce:

In 2018, the company launched the mobile app name “Lidl Plus” and “Supermarket Loyalty Card”. It was such a good move for the company to increase its sales through a digital platform. The company has made significant progress during the pandemic just because of its ecommerce and digital services.

Strong Cash Flow:

The company’s cash flow system is highly robust which enables it to invest in new projects, products, and services. It is one of the major strengths of the brand in the market.

Weaknesses of Lidl | SWOT Analysis of Lidl

Insufficient Workforce:

As we mentioned above, the company has a huge network of stores across the UK and Europe but they don’t have enough employees to run the business smoothly. The shortage of workforce is one of the major weaknesses of Lidl. It is hard to give the best customer service with limited employees. They need to hire more workers in order to increase their efficiency.

Scandals and Controversies:

Bad reputation, controversies, or scandals can jeopardize the overall brand image of the company in a matter of seconds. Controversies regarding selling horse meat, poor quality, and employee problems are some weaknesses that should be addressed timely to avoid any inconvenience. Such events or happenings can be bad for the company’s image.

Supply Chain Problems:

Many shelves of different products like toilet rolls, vegetables, and bread were empty due to the shortage and supply chain issues. Lidl should analyze these factors thoroughly to avoid such issues in the future. They are facing problems in the supply chain. They are not friendly, cooperative, and collaborative with their supply chain partners. For example, Lidl didn’t receive the distribution trucks that were not on time. Moreover, they also have a shortage of truck drivers.

Opportunities for Lidl | SWOT Analysis of Lidl

Expansion in Europe:

Currently, Lidl is operating in more than 32 countries with a strong network of 11000 stores. It is one of the most famous and fastest-growing retail chain brands in the UK. They do not have a strong presence in Europe. The brand can open new stores in different countries of Europe to diversify its business and reach. They can exploit available resources to gain the highest market share.

The United States Market:

The company is present in the United States with 300 stores and supermarkets. Lidl is planning to open up 600 more stores in the United States. It will be an excellent move and helps it to increase its brand awareness and sales. Lidl should take benefit of the US market because it is a leading consumer market in the world.

Threats to Lidl | SWOT Analysis of Lidl

Intense Competition:

It is a fact that the brand is growing at a very fast pace in Europe and the UK. But, the British market is pretty much crowded with so many big players like Sainsbury, Aldi, Tesco, Morrison, and ASDA. They are disturbing each other’s market share and profits by offering more high-quality products at competitive prices.

Changing Customer Preferences:

The overall political condition of Europe is very volatile after the Brexit deal. This thing has changed the customer preference and shopping decisions. This factor would impact the business performance of the company.

Final Thoughts | SWOT Analysis of Lidl

We have concluded after conducting this in-depth SWOT analysis of Lidl that it is a leading retail chain company in the UK and Europe. The brand should pay attention to its strengths and opportunities in order to mitigate weaknesses and threats. They should develop strong and friendly relationships with supply chain partners and workers. On the other hand, they should offer more discounts and exclusive deals on different products to get the attention of shoppers.

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April 27, 2022 0 comment

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SWOT Analysis of Deliveroo | Food Delivery on the App

by Shamsul April 26, 2022

SWOT Analysis of Deliveroo

Deliveroo is a popular British online food delivery provider company. It was founded by Greg Orlowski and Will Shu in 2013. It is currently headquartered in London, England, UK. The company has a strong global presence in more than 200 countries like UAE, Kuwait, Australia, UK, Belgium, France, Italy, Ireland, Hong Kong, Singapore, and more. Deliveroo has employed 2300+ employees to date to maintain its global operations. On the other hand, more than 110000 self-employed couriers are working for the brand. In 2021, the annual revenue of the company was 922.5 million pounds. Now, read the SWOT Analysis of Deliveroo.

Zomato, Uber Eats, DoorDash, ChowNow, Swiggy, Postmates, and GrubHub are the main competitors of Deliveroo. We are conducting its SWOT analysis to unearth its strengths, weaknesses, opportunities, and threats. In this way, we can easily identify the success story that the company has achieved in such a short period of time.

SWOT Analysis of Deliveroo

Company Name: Deliveroo

Founders: Will Shu, Greg Orlowski

Founded: February 2013, London, United Kingdom

Headquarters: London, England, United Kingdom

Parent Company:

CEO: Will Shu (Feb 2013-)

Type: Public

Sector: Online Food Ordering, Food Delivery

Tagline: Proper Food, Proper Delivery

Unique Selling Proposition: Providing a network of dedicated couriers and an ordering platform.

Customers: Youth from middle and higher-income groups.

Target Consumers: People from the middle and upper-middle class.

Revenue: 1.8 billion Euros (2021)

Net Income: 108.7 million Euros (2021)

Strengths of Deliveroo | SWOT Analysis of Deliveroo

Robust Supply Chain Network:

The supply chain and business model of Deliveroo are really interesting. The company does not produce its products, so self-employed couriers deliver the food. Just because of it, the company has attracted so many investors and people. They all work for a common goal without even disturbing each other’s comfort.

Cost Edge:

The company is managing its mobile application and has complete control over it. They don’t keep permanent employees because they don’t need them every time. This thing allows the brand to save costs in terms of taxes and maintenance. Moreover, Deliveroo hires people on a temporary basis.

Low Pricing:

The company has partnered with kitchens that produce cost-effective products due to their relations with local suppliers. This thing gives the company a competitive edge over its rivals. In short, the customers can easily get food at affordable prices from Deliveroo.

Excellent Management:

When it comes to management, Deliveroo’s management is highly excellent because of its owner’s professional intellectual career. Greg was an investment banker whereas Will was a director in a software firm. So, their experiences are working for the company. It is one of the major strengths of the company.

Strong Marketing:

Young adults are the main market of Deliveroo. These people love to order food from their phones because they are tech-savvy. So, the company tries even the smallest update and performs attractive marketing to get the attention of these young people. They are improving their online platform to make their experience even more amazing.

Facility and Location:

The company is not like a traditional kind of food delivery company. They have gig workers, freelance kitchens, and innovation that allow the brand to increase its business rapidly in other locations of the world. It is another big plus point of the company.

Weaknesses of Deliveroo | SWOT Analysis of Deliveroo

Tech Malfunction:

The company is heavily dependent on the app for running its business operation. The risk of tech malfunction is always there. Its app has crashed many times. Due to this, thousands of customers lost their orders and money. The whole situation brought plenty of backlash and criticism from customers. Moreover, the company’s communication system and customer support are also not very engaging.

Public Relation Problems:

The brand has indulged with the public in a negative way due to the riders’ safety and cycle training. They are not giving much protocol to their workers, which brings so many negative things about the company. Just because of this, the company has to deal with the media and the press. The company is making headlines over its policies.

Branding Problems:

In 2016, the brand re-branded everything in order to gain a competitive edge over competitors such as Uber Eats, Amazon Restaurants, and more. Its main attraction was its competitive prices. But, now it is charging so much from customers. This thing is destroying the brand loyalty among customers.

Opportunities for Deliveroo | SWOT Analysis of Deliveroo

New Alliances and Partnerships:

In 2016, the company partnered up with a famous brand Heineken in order to deliver online alcohol products. Just like this, the company can make new alliances and partnerships with other companies to deliver their products. This would allow the company to expand its global operations and sales.

Food Trends:

Some customers do not prefer the food of big restaurants. They prefer small kitchens because they prepare healthy and good food. Deliveroo can take advantage of changing food trends to target new customers. They should design its promotional and marketing strategy accordingly.

Latest Technology:

The food industry has increased since 2015. The company should invest in new resources and projects in order to take competitive advantage. They should exploit the latest technologies to attract and fulfill the demand of new customers. In fact, the company has collaborated with TripAdvisor in order to bring innovation in its services. This would increase the brand awareness and image of Deliveroo.

Threats to Deliveroo:

Changes in Taste:

After the pandemic of covid-19, the trend of takeaways and car dining has become more popular. We also know that people are more conscious about their health and food. The company should ensure that the food they are delivering must be tasty and healthy. Moreover, the changing diet patterns of customers can create big trouble for companies like Deliveroo.

Competitors:

The online food delivery market is highly competitive due to the presence of many big players like Grub hub, Amazon, Uber Eats, Hungry House, and so on. They are cutting each other’s profit and market share by offering innovative and unique services. The company should think about some new ideas to deliver food in order to stay competitive.

Poor Economy:

The current economic condition and recession have created so many troubles for companies like Deliveroo. The inflation rate and other economic factors have changed the spending power of customers.

Final Thoughts | SWOT Analysis of Deliveroo

It is very clear that Deliveroo is one of the leading online food delivery service companies in the world. They should work on their strengths in order to exploit more opportunities. The company should build a solid business plan in order to give tough competition to its competitors.

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SWOT Analysis of Costa Coffee Highly Special Product

by Shamsul April 26, 2022

SWOT Analysis of Costa Coffee

Costa Coffee is a British coffeehouse chain brand. It was founded by Sergio Costa and Bruno brothers in 1971. It is currently headquartered in Dunstable, England. In 1995, Whitebread acquired the brand. In 2019, they sold it to the Coca Cola Company for 3.9 billion pounds. The annual revenue in 2019 of Costa Coffee was 1.34 billion pounds. Currently, more than 18412 employees are working for the band. Chocolates, Gennaro Pelliccia, canned coffee, ice drinks, snacks, cold drinks, cakes, pastries, tea, and sandwiches are some main products of the brand. Read the SWOT Analysis of Costa Coffee.

The main competitors of the brand are Café Coffee Day, Starbucks, McDonald’s, Barista Lavazza, Mochas, and more. Today, we will highlight its success story by finding its strengths, weaknesses, opportunities, and threats. For this, we are going to use a reliable strategic management tool called SWOT.

SWOT Analysis of Costa Coffee

Company Name: Costa Coffee

Founders: Sergio Costa, Bruno Costa

Founded: 1971, London, United Kingdom

Headquarters: Dunstable, United Kingdom

Parent Company: The Coca-Cola Company

CEO: Jill McDonald (Dec 2, 2019-)

Type: Coffee Joints

Sector: Food and Beverages

Tagline: We make it better

Unique Selling Proposition: A famous British coffeehouse chain brand now going global with a variety of innovative products.

Customers: People looking to go to have a coffee and snacks at a hangout place.

Target Consumers: Youth in the higher and middle-income groups.

Revenue: Please check the report

Net Income: Please check the report

Strengths of Costa Coffee | SWOT Analysis of Costa Coffee

Strong Brand Recognition:

When it comes to coffee brands, Costa Coffee comes to our mind first. It is a globally recognized coffeehouse chain brand with a robust brand image. The brand identity of the company is also very strong. In more than 31 countries, it has a huge network of 3820 stores. More than 2420 out of 3820 stores are in the UK. They also launched a state-of-the-art roaster in 2017. It is the biggest brand in Europe.

Friendly Atmosphere:

The brand has built a loyal customer database over the years by offering high-quality products and services. These customers love to visit its stores every day to have some coffee. Its stores offer a friendlier and more attractive environment where people can enjoy some fun time. These loyal customers are the main reason for its success and remarkable sales.

Customer-Oriented Products and Strategies:

The coffees and drinks Costa Coffee offers are highly special because they make these products while keeping customers in mind. They produce customer-oriented products and build strategies for their interest. In short, their focus is mainly on the customers. That’s why Costa Coffee provides excellent service and quality.

Excellent Service Quality:

When it comes to sourcing and processing coffee beans, Costa Coffee is really conscious about it. The brand gives value to ethical practices, customers, and suppliers. These small things add value to the company and make significant importance. Some companies like Baristas serve something else with coffees that add value to their service.

Extensive Product Portfolio:

The product line of the brand is highly diverse as they offer chocolates, hot and cold coffee, drinks, cakes, pastries, sandwiches, tea, snack, and much more. Customers can get a variety of products from its stores easily to satiate their hunger.

Influence of Strong Parent Brand:

In 2019, Whitebread sold the brand to Coca Cola Company for 3.9 billion pounds. We know that Coca Cola is one of the leading cold drink brands in the world with an amazing brand identity and image. Working under such a big parent organization helps the company to exploit several benefits. They don’t need to invest more money in marketing because Coca Cola does this for the brand. As a result, its profitability, growth, and sales are touching the skies.

Weaknesses of Costa Coffee | SWOT Analysis of Costa Coffee

Limited International Presence:

The company has a strong presence in the UK and other developed markets. When it comes to developing countries, Costa Coffee does not have a strong presence. It shows the dependency of the brand on developed markets. If anything happens with these markets, it would badly hurt the business performance and profitability of Costa Coffee. They should increase their presence in other regions of the world for securing more market share and recognition.

Pricey Products:

Most of its products including coffees are pricey as compared to others. They don’t compromise on quality but premium prices are not acceptable for some users. On the other hand, its competitors are offering good quality coffee and products at reasonable prices. It would negatively affect Costa Coffee’s sales and customer loyalty.

High Sugar Coffee and Drinks:

According to some health-conscious customers, Costa Coffee does not produce healthy coffee and products due to the high sugar content. Just because of this reason, its coffee sale has significantly dropped due to the diet trends. It is a weakness of the brand and they can fix it by offering healthy diet products containing low sugar content.

Opportunities for Costa Coffee | SWOT Analysis of Costa Coffee

Alliances and Acquisitions:

In order to increase its internal expansion, sales, and profitability, the brand should acquire small coffee brands and companies. They can also work as a partner with big companies. Such alliances and acquisitions would help the brand in different ways like market expansion, product expansion, and more. On the other hand, the company should revise its pricing policy.

Market Expansion:

By venturing into other international markets, Costa Coffee can easily expand its business and operation. This thing directly improves its revenue stream and market cap. There are so many growth opportunities in both developed and developing countries for Costa Coffee. It is imperative for the brand to take benefit of this thing.

Increasing Product Portfolio:

In order to attract more customers and generate more revenues, the brand should expand its product line by offering healthier options. As a result, they can easily target health-conscious customers. Moreover, Costa Coffee can also sell coffee beans, coffee-making equipment, and other similar products.

Threats to Costa Coffee | SWOT Analysis of Costa Coffee

Fierce Competition from Big Players:

Running a coffee business in some countries is really difficult and challenging. It is because these countries are already occupied with many big players like Starbucks, McDonald’s, Caffe Nero, and more. These rivals are very well-reputed in the world because they spend millions of dollars on marketing, promotion, and product innovation. It is hard for Costa Coffee to maintain its position in such a highly competitive market.

Price Competition:

The presence of local players in the market can’t be ignored. They are giving tough competition to Costa Coffee and hurting its market share. They are offering affordable products in the caffeine segment. Such completion from these local players could be dangerous.

Recession:

The ongoing economic recession has reduced the spending behavior of middle-class customers. With limited income, they can’t afford Costa Coffee products which ultimately hurt its sales and annual revenue.

Final Thoughts | SWOT Analysis of Costa Coffee

There is no doubt that Costa Coffee is one of the biggest players in the coffeehouse chain brand with a strong market position. It is necessary for the brand to work carefully on its weaknesses in order to reduce the danger of threats. They should exploit opportunities in order to strengthen their position.

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Mergers and Acquisitions

Table of Contents

Analyzing Industry Ecosystem

Defining Opportunity Segments

Creating Long List

Assessing the strategic fit

Assessing Feasibility of deal

Financial Performance

Defining watch list and action list

Data Collection

Interviews with CEO

Interview with CFO

Interview with Vice CEO

Transition

Quantitative Research

Biologically Inspired Algorithms

Experimental Approach

Pre-Acquisition Process

Valuation and Due Diligence

Analysis of Due diligence and valuation

Simplification Of the Acquisition Process

Conducting of due-diligence in the post-acquisition process

Considering organizational fit throughout the entire process

Quantitative Analysis Results

SWOT Analysis of Jollibee Food

SWOT Analysis of Jollibee Food

Strengths of Jollibee | SWOT Analysis of Jollibee Food

Customer Loyalty:

24 Hours Service:

Strong Distribution Network:

High-Quality Food:

Popular Brand:

Variety of Products:

Strong Brand Value:

Weaknesses of Jollibee | SWOT Analysis of Jollibee Food

Opportunities for Jollibee | SWOT Analysis of Jollibee Food

Threats to Jollibee | SWOT Analysis of Jollibee Food

Final Thoughts | SWOT Analysis of Jollibee Food

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SWOT Analysis of Lidl

SWOT Analysis of Lidl

Strengths of Lidl | SWOT Analysis of Lidl

Award-Winning Brand:

Own-Label Products:

Discounts and Deals:

Robust Network:

Excellent Customer Service:

E-commerce:

Strong Cash Flow:

Weaknesses of Lidl | SWOT Analysis of Lidl

Opportunities for Lidl | SWOT Analysis of Lidl

Threats to Lidl | SWOT Analysis of Lidl

Final Thoughts | SWOT Analysis of Lidl

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SWOT Analysis of Deliveroo

SWOT Analysis of Deliveroo

Strengths of Deliveroo | SWOT Analysis of Deliveroo

Weaknesses of Deliveroo | SWOT Analysis of Deliveroo

Opportunities for Deliveroo | SWOT Analysis of Deliveroo

Final Thoughts | SWOT Analysis of Deliveroo

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Read More:

SWOT Analysis of Costa Coffee

SWOT Analysis of Costa Coffee

Strengths of Costa Coffee | SWOT Analysis of Costa Coffee

Strong Brand Recognition:

Friendly Atmosphere:

Customer-Oriented Products and Strategies:

Excellent Service Quality:

Extensive Product Portfolio:

Influence of Strong Parent Brand:

Weaknesses of Costa Coffee | SWOT Analysis of Costa Coffee

Opportunities for Costa Coffee | SWOT Analysis of Costa Coffee

Threats to Costa Coffee | SWOT Analysis of Costa Coffee

Final Thoughts | SWOT Analysis of Costa Coffee

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