Chapter 14 Mergers & Acquisitions
This week we will discuss Amazon and merger and acquisition strategies.
This week we will discuss Amazon and merger and acquisition strategies.
Amazon's motivation for engaging in mergers and acquisitions is to gain the competitive advantage through several types of mergers and acquisitions. A vertical merger is when a firm acquires former suppliers or customers. A horizontal merger which happens when a firm acquires a former competitor. Product extension merger is to gains access to complementary products through an acquisition. Market extension merger occurs when a firm gains access to complementary markets through an acquisition. Finally, Conglomerate merger is when there is no strategic relatedness between a bidding and a target firm. A merger and acquisition enable a firm to exploit competitive opportunities and neutralize its threats. In Amazon case they had one of the largest merger & acquisition deal that corporate America has seen in a long time, Amazon announced its acquisition of the grocery chain 'Whole Foods' for $13.7 billion. Amazon has been following an aggressive plan of expansion and diversification for years, both by innovating and through more than 100 acquisitions and investments. This Whole Foods acquisition extends amazon’s brick-and-mortar footprint. In the end, this gives Amazon a much stronger position in the marketplace and capitalizes on Whole Foods’ huge and loyal customer base. Amazon’s most recent acquisition is PillPack is an online pharmacy the lets users buy medications in pre-made doses. Within the merger and acquisition strategy. The strategies should be either: valuable, rare, private, and costly to imitate and Amazon has gained the competitive advantage use all of those strategies.
Barney, J (2011). Gaining and Sustaining Competitive Advantage (4th ed). Upper Saddle River,
NJ: Pearson.
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