A CASE of a MERGER and ACQUISITION MEGA BLIND SPOT. for the ACADEMY OF MARKETING STUDIES Dr. J.D. Williams Kutztown University. ABSTRACT. M&A mania -- The world has seemed fixated on growth through M&A as evidenced by the thousands of mergers that have taken place over this past decade.
forthe ACADEMY OF MARKETING STUDIES
Dr. J.D. Williams
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- Marketing offers both
- Most horizontal mergers should include marketing components
90% 70 % 40% 20%
20% of the time
Over 50% of marketing is consider soft-side performance criteria (i.e. perceptions, desires, (mind-share, heart-share), dislikes & personal values)
Marketing also shares quantitative components (i.e. product production costs, break-even analysis, pricing strategies, logistic costs, & promotion cost/benefit analysis)
Marketing offers MARKET SHARE for a process or transition level contributor
TABLE 3A - 10 Most Active Industries by Number of Transactions in 2005
Rank Industry No. of Deals % of all M&A Deals
1Business services 1,295 17.7%
2Software 647 8.9%
3Real estate firms 406 5.6%
4 Durable goods wholesaling 256 3.6%
5Investment & commodities firms 246 3.4%
6 Health services 245 3.4%
7 Measuring, medical & photography 221 3.0%
8 Oil & gas 210 2.9%
9Insurance 207 2.8%
10Hotels & casinos 183 2.5% .
Weighted Marketing Effective/ Acceptance Ranking
Factor (1-5) Element ( poor) 1 2 3 4 5 ( excellent)
5 Marketing Leadership (XML) n .
3 Marketing Strategy (XMS) n
2 External Market Assessment (XMA) n
3 Internal Audit of Resources (XIA) n
2 Target Market Profiling (XTM) n
5 Product or Service Strategies (XPS) n
2 Place/Logistical Strategy (XL) n
4 Promotion Mix Planning (XPM) n
2 Pricing Strategies (XP)
4 Monitor & Control Systems (XMC) n
2 MKT. Commercialization (XMC) .n
3 Market Expansion, Retraction, & n
Niche Market Selection (XNMS) n
Weighted Value of a firm’s M&A Marketing Expectations = YME, where ‘n’ represents the selected evaluation of the potential merged firms marketing component position.
YME = 5 (XML)n + 3(XMS)n + 2(XMA)n + 3(XIA)n + 2(XTM)n + 5(XPS)n + 2(XL)n + 4(XPM)n + 2(XP)n +4(XMC)n + 2(XMC)n + 3(XNMS)n
Establishing acceptable to unacceptable range
185 - 150 highly acceptable
149 - 130 acceptable
129 – 100 marginally acceptable
99 – 70 highly questionable
69 – 0 unacceptable