The Pros And Cons Of Acquisition Strategy

Acquisition strategy can propel a company or multiple companies into a next level of profits that they could not achieve on their own. Some of the factors that make this decision wise include gaining quick access to new technologies and creating a more cost-efficient operation. If a company acquires another in the same industry “there’s usually enough overlap in operations that certain inefficient plants can be closed or distribution and sales activities can be partly combined and downsized.” (Gamble, Thompson, 2011, pg 120). I am going to go over 2 companies that had opposite results due to their acquisitions and why I think their plans ultimately panned out good or bad.
The first company that I would like to bring up is Citicorp who is attempting to branch out into Tokyo, Japan. Citibank has been able to make a name for themselves on the world financial markets but was having trouble in this area because of the problem of getting into the banking market in Japan. “Citibank reached an agreement in early 1988 with Tokyo Sogo for mutual access to automatic teller machines.” (K...