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Key Topics
Requirement
Merger & Acquisition
Solution
Introduction
In this present paper, we will discuss the merger and acquisition between Microsoft and LinkedIn. The Microsoft has acquired the LinkedIn by paying $26.2 Billion. It is the biggest heftiest acquisition in the software industry. It is a type of conglomerate merger and acquisition because both the companies have different industries and business process.
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Problem and challenges
The problems and challenges are explained below:
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Unprofitable asset: The asset of LinkedIn is not profitable for the company due to which is a major challenge for the company because the acquisition is mainly made to add synergy to an organization, but the company has faced the problem of managing the unprofitable assets.
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No clear path forward: The business plan of LinkedIn is not viable due to which the company has faced the major challenge to integrate the LinkedIn with their company which helps to provide the competitive advantage to the company.
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Poor revenue forecast: The revenue forecasting of LinkedIn is poor revenue which is $11 Billion due to which the company faced the problem of generating the higher revenue by the acquisition of the company. The nature of the business is not providing synergies to the business which is a major problem for the company (Piesse et al., 2013).
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Brand image: The brand image of LinkedIn is not popular in the eyes of the consumers due to which the company is not receiving synergies by the acquisition.
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Cultural difference : The culture of both the organizations is different due to which the company is facing the challenge to integrate the business process of both the companies (Almor et al., 2014).
Recommendation
The Microsoft can provide the synergies through using the following recommendations which help the company to generate higher revenue from the acquisition by resolving the challenges faced by the company.
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Reasonable decision on staff
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Effective implementation of acquisition strategy
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Avoidance of disruptions of ordinary business
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Integrated business plan
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Rapidness counts
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Implication
The personal department plays a critical role in the implementation of acquisition strategy which helps to integrate at the right time into the process of acquisition. The reasonable decision is taken by the human resource department related to the staff which helps to add synergies to the business.
The change in the structure, process, and products requires training to the existing employees which help generate revenue through implementing the acquisition strategy successfully (Ge et al., 2012).
The smooth running of ordinary business needs to be assured through building the relationship with the customers which helps to provide a competitive advantage to the company.
The company must develop the integrated business plan which is implemented on the whole business process by clarifying the business objective, tasks, time allocation and progress of the business.
The rapidness counts with the integrating planning which includes implementation of a planning process which helps the company to add competitive advantage by using integration tools such as organizational tools and timetables.
Resources required
The human resource and financial resources are required for implementing the recommendations which help to develop the integrated planning, implantation of acquisition strategy and development of an integrated business plan which enables to resolve the problems and faced by the company.
Benefits of recommendation
The recommendations help the company to add synergy which is the ultimate objective of merger and acquisition. Secondly, the recommendations help to resolve the problems faced by the company with the acquisition. Thirdly the recommendations help to implement the acquisition strategy in a most efficient and effective manner which enables to add competitive advantage to the company.
Milestones, risk & assumptions
The milestones that need to be considered includes the development of integration acquisition plan, integration of business plan, time framework, implementation of acquisition plan, and effective communication plan. The various risk factors that need to be considered at the time of acquisition includes financial risk, credit risk, security risk, legal risk, operational risk, and market risk which needs to be considered by the company at the time of merger and acquisition. The company must assume inherited risk, difficulty in implementation of the acquisition strategy, the time required for adding synergy and others factors which are generated at the time of acquisition.
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Piesse, J., Lee, C. F., Lin, L., & Kuo, H. C. (2013). Merger and Acquisition: Definitions, Motives, and Market Responses. In Encyclopedia of Finance (pp. 411-420). Springer US.
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Almor, T., Tarba, S. Y., & Margalit, A. (2014). Maturing, technology-based, born-global companies: Surviving through mergers and acquisitions. Management International Review, 54(4), 421-444.
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Ge, C., & Huang, K. W. (2012). The impacts of human capital on the value creation by Mergers and Acquisitions: An event study in software industry.
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