Mergers, acquisitions and international strategies

Mergers, acquisitions and international strategies

Mergers and acquisitions occur for many different reasons, it involves companies stuck in different circumstances and can be initiated by either of the two, the one which wants to be taken over or the one looking to strengthen or expand its financials by taking the other company. (Malmendier 2008, pp. 20-43)

Amazon's acquisition of Zappos

The company selected here for the discussion is Amazon. Amazon is the pioneer of online product distribution, cheaper shipments of goods, catering online orders faster and overwhelming its competitors. Below we will discuss, the acquisition of Zappos in 850 million dollars, putting the famous footwear and online apparel in the control of Amazon ,what brought Zappos to the table and what made Amazon put close to a billion dollars for Zappos.

Amazon's reason behind Acquiring Zappos

Majority of Zappos shareholders, made its senior management to look for owners that would ensure the continuity of its operations and keeping the business running. Zappos wanted a comprehensive structure for their sales, with defined market and goals of penetrations into new markets. (Stafford 2001,pp. 103-120)

They wanted to perform well at the trade shows and other marketing activities. But with its strength back then this was not possible with the dynamics of the business world and only a strong organization could have led it to do, Amazon knew there is immense potential of growth in this, they acquired Zappos and all what Zappos was planning became reality as the growth in the following year of acquisition showed. This was really successful as they received access to talents at all levels, they received guidance on matters of supply chain and HR management and in all the other matters for its substantial benefits.

Amazon's strategy on acquisitions directly aids it objective to double the group's profit .It aims to achieve this aim through the mix of organic growth and acquisitions. Amazon's belief on acquisition is that these add value to its portfolio by the means of broader technological and geographic footprints, assets of intellectuals and that talent of the new management. Amazon's strategy is to acquire businesses with intellectual assets who

improve existing activities

mix with the culture

and strong performance on finances

They believe in highly targeting their acquisitions acquiring companies which are of the familiar markets or are from the sectors they are acquainted with. They believe that they have the financials resources to invest and they base ...