Acquiring another organization in same Industry Essay

Acquiring another organization in same Industry - Essay Example Strengths/Opportunities: (1) Achieve geographic expansion by means of selling more of the same product; (2) Use joint resources to different product. Commonly referred to as â€Å"synergies†; (3) Increased market power (no competitor in the market); (4) Benefit by using the same brand name to promote multiple products. Weaknesses/Threats: (1) Risk of anticipated economic gains; (2) Management to make sure (before acquisition) that imagined benefits are real, For instance, Siemens Pakistan’s technical partnership with Karachi Electric Supply Corporation (KESC) failed and finally Siemens had to discontinue with KESC. Recommendations: Now-a-days â€Å"Horizontal Integration† is the most common growth strategy taking place all over the world. We have tens of examples where horizontal integration has effectively & successfully taken place. In the recent past Unilever Pakistan bought-out the Polka ice cream and launched a new ice cream in the name of Walls. Although it was an unrelated business integration – i.e. Unilever was not in the ice cream business before, it has been very successful in this strategic move and doing well in Pakistan. Likewise, mergers/acquisitions of pharmaceutical firms and banks, etc. have also proved to be successful. The philosophy behind horizontal integration is: If you can’t beat, buy it. In my opinion â€Å"horizontal integration† should be beneficial for M/s. McBride Financial Services because the firm already has experience and relevant expertise to run the same kind of business. It would be simply like a business expansion. Moreover, this way intensity of rivalry (competitor) would get diminished and the firm could smoothly advance with the business acquired. However, two basic questions need to be addressed before acquisition: Lam, T. & Lao, T. (2010) under the introduction states that, â€Å"Horizontal integration should enable a firm to expand its products and existence