What is it about?
Competitive retaliation is a significant constraint to merger and acquisition performance that has largely been overlooked by management research. We use competitive dynamics theory in a novel way to develop how acquisition characteristics impact the risk of competitor retaliation. We then outline different tactics that acquiring firms can use to reduce competitor awareness, motivation and capability associated with retaliation. Our ideas provide managers a path to improved acquisition performance, as well as opening new avenues for research.
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Why is it important?
While acquisitions remain an important tool, a significant percentage of acquisitions fall short of creating value. Considering external factors relating to customers and competitors can be equally as important as internal integration.
Perspectives
David R. King earned his PhD in strategy and entrepreneurship from Indiana University's Kelley School of Business. After retiring from the U.S. Air Force, he joined academia and he is currently an Associate Professor in the College of Business at Iowa State University where he teaches undergraduate business strategy. Dave’s research focuses on complementary resources, merger and acquisition (M&A) integration and performance, technology innovation, and defense procurement. An award winning researcher, his research appears in leading management journals.
Professor David R King
Iowa State University
Read the Original
This page is a summary of: Addressing Competitive Responses to Acquisitions, California Management Review, May 2016, SAGE Publications,
DOI: 10.1525/cmr.2016.58.3.109.
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