Best Types of Acquisition Strategy to Use Based on the Business Needs

Modern organizations are actually political systems. Therefore, to understand the dynamics of organizational behavior, it is necessary to know the most effective strategies and tactics for acquiring power in an organization.

The Best Strategy to Improve Your Business

It is difficult to imagine a large company that does not have a strategy: with a probability of 99.9%, it would not have reached such a scale without competent long-term planning. But representatives of small and medium-sized businesses often ignore this document, preferring to it the development of a network of useful acquaintances. Business strategy is a set of methods and a step-by-step tactical guide in one bottle.

The choice of strategy and tactics for acquiring power in an organization can be combined in different ways with the formal order in the organization, its norms, and principles: peacefully coexist with them, be in conflict with them, or actually replace them. In any case, for the effectiveness of their activities, the manager must know the essence of management processes, be able to properly understand them, and build their behavior accordingly.

When defining a firm’s strategy, management must answer three basic questions:

  1. What business or activity should be stopped?
  2. What business or activity to continue?
  3. Which business to go to?

This means that the strategy focuses on two aspects, what the company does and does not do, and what is more important and what is secondary in the activities of the company for a certain period. In this regard, there are three main areas of development of the company’s strategy.

Such a thorough and detailed study of the purchased business will help to save the investment. However, sellers are not always ready to reveal all their “secrets” to any interested person. To do this, there are legal mechanisms that protect both the buyer’s money and the seller’s trade secrets. A preliminary agreement, a framework agreement, or, for example, a memorandum of intent is concluded at the first stage of the transaction.

What Are the Best Types of Acquisition Strategy Based on Your Business Needs?

Acquisitions sometimes referred to as takeovers, are often more negative than mergers. As a result, the acquiring companies may refer to the takeover as a merger, even though it is clearly a takeover. Check the best types of acquisition strategies to use based on the business needs in the article below:

  1. Concentrated acquisition growth strategies.

This group includes those strategies that are associated with a change in the product and (or) market and do not affect the other three elements. In the case of following these strategies, the firm is trying to improve its product or start producing a new one without changing the industry.

  1. A strategy for strengthening market position.

A strategy for strengthening market position in which the firm does everything to win the best position with this product in this market. This type of strategy requires a lot of marketing effort to implement. There may also be attempts to implement the so-called horizontal integration, in which the firm tries to establish control over its competitors.

  1. Reduction strategy.

This strategy is usually left to the most difficult moment. Its essence lies in setting the level of pursued goals below those achieved in the past. Speaking more specifically about the reduction strategy, then these can be options for liquidating the company, cutting off the excess, or downsizing and reorienting.

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