Merging and Acquisition is a very popular way of industry development and efficiency. A case study looking at steps involved in Morrison’s take over of Safeway Supermarket
Introduction
In the rapidly changing and improving companies and businesses, the management of companies is being challenged in terms of demonstrating their capacity to think and act strategically. As the business wants to expand abroad, there are certain tasks that need to perform. Accordingly, most organisations develop in two different manners. The first one is through the natural or the organic ways or simply by merging with other organisation. It can be said that the route of the merger is suitable if and only if the development in conventional goods/services and the market environment is confined because of the size or share of the market. Merger is also appropriate when a more advanced degree of growth and development in terms of turnover is demanded, for whatever motive there is. However, acquiring, merging or starting up a industry on the external part of the diversification of the market environment and products can be considered as an outstanding approach to strengthen the competitiveness of an organisation (Kotler, 1983).
The process of merger and acquisitions in the retail and supermarket industry has been noted to be one of the foremost vehicles in line with the transformation of a key set of economic activities that stand at the center retail market system. Hence, it can be agreed upon that that the result or outcome of the merger and acquisition process in terms of the structure, conduct, and performance of the retail industry has a disproportionate impact on the economy as a whole. This report will tackle the merging steps involved in Morrison’s takeover of Safeway Supermarket.
Morrison takeover of Safeway
Morrisons Supermarket intends for sustainable growth as a broad supermarket leader in England and also for segment competitiveness. This is the simple objective of the acquisition of Safeway Supermarkets. In both cases, Morrisons Supermarket as well as their branches including Safeway will play critical roles. Morrisons Supermarket is able to generate its broad leadership usually by acquiring other strong supermarkets as well as their products, which are then combined into a new, larger industry. Offering training to its employees, improving the industry operations, and the introduction of new technologies then reinforces the positions of the various Morrisons Supermarkets. Such practically has directed to economies of scale that is able to generate a distribution network for both the local and international branches. If an area is already in the control of other supermarkets, Morrisons Supermarket has been able to devote their attention towards the development of a premium segment with its various branches.
The main goal of Morrisons Supermarket, on one hand, is to secure the growth of its business in a sustainable approach, while at the same time constantly enhancing the industry’s profitability. The strategy to attain the following steps with this involves four elements:
B. Benefits of Safeway Takeover
Among the competitive advantages enjoyed by Morrisons Supermarket upon taking over of Safeway included the following:
· Economies of Scale and Scope in product research and development arising from its various and different branches situated in the United Kingdom.
· Unique Quality Products owing to heavy emphasis on research
Morrisons Supermarket’s ability to commit with research & development activities has always been one of its top approaches to remain competitive in the market.
· Differentiated Products
With the context of the production and marketing of differentiated products originating from their research and development activities, Morrisons Supermarket is able to generate own firm-specific advantages. The continuous pursuit of research and development processes enables the industry to produce a steady stream of originally differentiated products which makes it harder for competitors to find substitutes. Because of this differentiated approach, Morrisons Supermarket is able to market their products around England, which enables them in turn to maximize the returns on research and development expenditures.
Reference
Kotler, P. (1983), Principles of Marketing, 2nd edition, Prentice Hall, Englewood Cliffs, New Jersey.
Mirvis, P.H, and Marks, M.L. (1992). Managing the Merger: Making it Work. Beard Books.
Credit:ivythesis.typepad.com
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