How to make the most of a business merger

Business mergers in Ohio may not be as high-profile as those involving Fortune 500 companies in New York and California. Even so, without a clear strategy and careful planning, companies may set themselves up for a disadvantage when completing mergers. This is especially the case for smaller businesses when merging with larger and more powerful companies.

In 2018, CNN reported that “merger mania” had led to $2 trillion in deals less than five months into the year. One of the major contributing factors for these mergers is that larger multinational corporations were beginning to recognize the value of scooping up smaller firms and absorbing their value into a larger commercial infrastructure.

Forbes notes that in order to get the most out of this business strategy, companies should focus on capabilities. Often, when one company acquires another, it is to take advantage of key capabilities or even to get rid of a competitor in the process.

Thus, rather than integrating or absorbing this capability, it may be best to let the better company handle this process on its own to maintain its competitive advantage in the market. This may also bring in more money for the parent company. This was the case when Facebook acquired Instagram and WhatsApp. All three platforms still compete independently based on what they do best; Facebook reaps the benefits.

In other instances, boosting the competence of the combined brand is more important. This helps the overall brand to optimize its full potential. One excellent example of this is when Google bought YouTube way back in 2006. Even though Google and YouTube operate as semi-separate entities, both brands absorbed each other’s core competencies to make Google the biggest and best search engine. Care to guess who comes in second? Why, YouTube of course. Thus, together, Google and YouTube are a search engine powerhouse.