Davis Group Case Study

To begin, a brief synopsis of the Davis Group. The group is the largest in the UK, with three main divisions, textile maintenance, modular building rental, and tool hire. Each of these operations is a market leader, and they have reached a point where growth is limited, due to a stable British marketplace. Of the three business the textile business is the strongest, making 45% of the firm’s revenues, which suggested that to achieve the expected growth, they needed to focus on that business and expand beyond the United Kingdom.

There are any number of ways a business could expand either organic growth or inorganic growth. Organic growth being to expand and grow on our own, inorganic growth requires growth through acquisition or some other external factor. I would suggest that for the David Group, taking over another business would be a strong option, as would a merger with another business in the same sector. A takeover (where one firm takes a controlling stake in the other, that is over 51% of the firm 's stock/shares) is a sound move as if it is done properly, by targeting a business in a positive

An example of this would be the merger between Compaq Computers and Hewlett Packard, which when complete created a business with revenues of over $100 billion, and a large market share. It had the added benefit of propelling both businesses further up the stock market ranking (9th on the S&P 500), which made it easier to raise funds for future business plans. So in this instance, the merger brought market share, a wider customer pool, stability, access to more money to fuel further growth, a security of being a larger firm and harder themselves to takeover, and any number of synergies that allowed for cost