Choose two (2) public corporations in an industry with which you are familiar � one (1) that has
acquired another company and operates internationally and one (1) that does not have a history of
mergers and acquisitions and operates solely within the U.S. Research each company on its own
Website, the public filings on the Securities and Exchange Commission EDGAR database in the University’s online databases, and any other sources you can
find. The annual report will often provide insights that can help address some of these questions.
Write a six to eight (6-8) page paper in which you:
- For the corporation that has acquired another company, merged with another company, or been
acquired by another company, evaluate the strategy that led to the merger or acquisition to determine
whether or not this merger or acquisition was a wise choice. Justify your opinion. - For the corporation that has not been involved in any mergers or acquisitions, identify one (1) company
that would be a profitable candidate for the corporation to acquire or merge with and explain why this
company would be a profitable target. - For the corporation that operates internationally, briefly evaluate its international business-level
strategy and international corporate-level strategy and make recommendations for improvement. - For the corporation that does not operate internationally, propose one business-level strategy and one
corporate-level strategy that you would suggest the corporation consider. Justify your proposals. - Use at least three (3) quality references. Note: Wikipedia and other Websites do not quality as
academic resources.
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 2
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES
Merger, Acquisition, and International Strategies: Case of eBay and Bureau of Trade
Introduction
eBay, an international online-based company acquired Bureau of Trade in 2013, with an
objective of promoting its male fashion business. eBay is well known for its e-business which
allows buyers to purchase all kinds of products online, from sellers across the globe. Bureau of
Trade on the other hand is a male online marketplace whose main strategy is personalization.
This paper is a discussion of the acquisition, with an objective of establishing the feasibility of
the strategy for eBay and its international business and corporate level strategy; and alternative
acquisition candidates for Bureau of Trade and possible business and corporate level strategies
that the company could consider.
Strategy leading to acquisition (eBay)
Companies undertaking mergers and acquisitions often seek to gain from the association
through knowledge and expertise, new markets (market expansion and new markets penetration),
business strategy and financial gains (Johnson et al, 2014). eBay’s strategy leading to the
acquisition was the drive to enhance its fashion business, as the company sought to modernize its
website through introducing and experimenting with novel shopping experiences for its
customers. Bureau of Trade would bring in expertise on men’s fashion and personalization;
hence helping the company to achieve its objectives. As a ‘content meets commerce’ site, Bureau
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 3
of Trade would help improve sales price for merchandise sold on the site. This stems from the
fact that when merchandise on the site was written about by the Bureau, they ended up gaining
more value and hence sold at relatively higher prices. Working together would ensure that the
companies came up with innovative ideas to promote profitability.
The merger was a wise choice for eBay because it has been instrumental in helping the
company develop content to accompany its products. This plays a major role in enhancing
profitability based on higher prices that the company can now fetch from its businesses and the
increased customer traffic on the site. Bureau of Trade blends commerce and media to sell items
that are of interest to men including classic cars, furniture, petrified lighting and vintage
chronographs among other items that are likely to capture men’s attention. Through narrative,
Bureau of Trade sells the merchandise to interested parties, thus adding value to the product.
This kind of value addition was considered beneficial for eBay as it was expected to play a major
role in promoting sales. The acquisition would help eBay in achieving personalization and since
Bureau of Trade is an expert in this line, the objective is likely to be achieved effectively as
envisioned by eBay. The modern customer is highly interested in personalization and always
wants to make informed choices before buying an item. Bureau of Trade would ensure that eBay
succeeds in this endeavor through the creation of high quality content and availability of quality
products on its website.
Alternative profitable acquisition candidate (Bureau of Trade)
A closer look at the acquisition reveals that Bureau of Trade could have been acquired by
any other company that is a direct competitor of eBay and still perform exceptionally. Google,
would have been a highly profitable choice for Bureau of Trade based on its growing
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 4
performance potential as the largest search engine globally. The company would have been
acquired to contribute to Google’s content development with an objective of enhancing search
engine optimization. Google has acquired various marketing and blogging sites with similar
strategy as Bureau of Trade including Genius Labs, Sprinks, Applied Semantics and Double
Click among others. These companies have gained significantly from the acquisitions and also
contributed immensely to Google’s growth. Besides working with one of the most profitable
businesses, Bureau of Trade would have benefited through greater partnership and an
opportunity to serve more people through Google.
Google is well known for its innovative strategies that have been instrumental in its
growth. These include an innovative culture that Google maintains in a bid to remain
competitive. In this regard, all companies acquired by Google have to adapt the same strategy
and this has helped them become highly successful over the years. An example is Android which
Google acquired in 2005. Since its acquisition, Android has developed numerous mobile
application programs under Google’s ownership. The company remains well known and relevant
in the corporate world based on these achievements, unlike Bureau of Trade whose brand has
literally been absorbed into eBay, thus losing its popularity.
Google is a highly promising organization, based on its rapid growth. Google has great
potential and is likely to be among the most successful companies in the world. With an annual
sales growth rate of 22.78%, Google has been successful in creating a well performing
organization that any small company would want to be part of. Therefore, Bureau of Trade
would have benefited from an acquisition by Google through by joining one of the fastest
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 5
growing companies. That would create significant value for the company and hence its
reputation.
eBay international business and corporate level strategies
eBay in its bid to maintain a valuable niche in the industry has adopted various
international business and corporate level strategies. These have played a major role in
promoting its online presence, attracting customers and businesses and promoting sales across
the globe. These are discussed as follows:
International business level strategy
eBay utilizes differentiation as its international business level strategy, with an aim of
enhancing new markets acquisition. The strategy, which has helped the organization achieve
sustainable competitiveness has is quite broad. However, all activities are geared towards
differentiating the company’s service from competitors. The business level strategies can be
classified into different aspects as follows:
Product variety: eBay stocks millions of products on its website ranging from personal care
items to machinery, household items, toys and clothing among others, all from a variety of
suppliers. This allows customers to choose the item they want to purchase from a wide range of
products. It also ensures that customers find what they are looking for at their own budget.
Engaging website: eBay’s website is not only interesting and easy to use but it also provides
customers with all the relevant information needed in making a decision. Each product includes
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 6
pictures, a detailed explanation and video where applicable in order to help customers make
informed choices. The pages searched by customers also provide information on other products
that might be of interest to them. In order to ease navigation, eBay has listed their products based
on categories and it also allows individuals to make direct searches for products they are looking
for. Finally, the website has adequate capacity to ensure that it can accommodate the high traffic
to the site at any given time, as buyers navigate and make purchases on the site.
Brand Name: eBay has grown to become a household name due to the level of effort put by
developers in promoting the brand. Through the sale of quality products, product variety, timely
delivery, convenience in shopping and a sustainable business model, eBay has managed to create
a lasting impression on customers, making it one of the most sought after online purchasing site.
Whenever customers think of buying something online, they are more likely to think about eBay.
Global reach: eBay has attempted to reach as many countries as possible to ensure that products
reach the intended clients. As a result, the company is able to compete effectively with other
online businesses that mostly operate in the United States and therefore do not deliver to foreign
countries. This differentiation strategy has played a role in promoting performance.
eBay Community: The Company strives to be as inclusive as possible by making customers feel
like they are part of the process. In this relation, eBay allows customers to give feedback and
make suggestions and opinions regarding its business. This has created customer loyalty and also
singled out eBay as a ‘go to’ website where customers can read reviews and feedback on
products before making purchasing decisions.
International corporate level strategy
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 7
Diversification can be considered eBay’s international corporate strategy. This means
that the company strives to provide information that appeals to both individual and corporate
customers. These groups consist of the individual buyers, family shoppers, hobby shoppers and
sellers, casual buyers and sellers, antique collectors, professional clients and corporate sellers. It
is difficult to maintain a website that caters for the needs of each of these customers or sellers
and eBay must therefore strive to achieve diversification to ensure that user satisfaction is
achieved. Therefore, their website must be appealing to each of these users. The same applies to
the products stocked by the company. eBay has ensured that all kinds of products demanded by
all types of customers around the world are stocked. This is achieved through identifying
commonly purchased items and performing regional background research to determine products
that are of interest to customers and the prices at which they would be willing to buy them. In
pursuit of diversification, eBay has in the past developed specific creations such as eBay Real
Estate, eBay motors and LiveAuctions to cater for different customers.
eBay continues to acquire other companies in different locations across the world,
involved in online selling and marketing to upgrade its portfolio. Such examples include
Up4Sale, iBazar and Internet Auction Co. (online auction companies); Rent.com, Gumtree,
Craigslist and OpusForum.org (classified advertising companies). eBay also acquired PayPal, an
online payment method to ensure that it could provide users with an easy way to send and
receive payments. This kind of diversification has ensured smoother operations and a better
shopping experience for customers. The improvement in service can be explained by the synergy
between the different businesses. eBay and Paypal for example has enhanced easy payment for
products bought on the site while Gumtree has ensured that the company’s products are visible to
consumers through targeted marketing.
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 8
Business and corporate level strategies that Bureau of Trade could consider
In a bid to promote performance, there are various business and corporate level strategies
that can be applied by Bureau of Trade.
Business level strategy
New business focus is one of the business level strategies that Bureau of Trade could
adopt. It is established based on background information that the company was mostly involved
in the development of content that meets the needs of men by providing content and information.
However, there are other sectors that need to be explored including home furniture, gardening,
office supplies, women and children wear. According to Johnson et al (2014), exploring new
business areas creates new opportunities for businesses and ensures that its profitability level is
enhanced.
New business focus is suggested as a possible consideration because it is bound to create
additional value for the business. By expanding its coverage to involve other business categories,
Bureau of Trade could create value for these business areas and thus promote sales for products
in these categories. Lynch (2012) notes that besides allowing a business to acquire more
customers, venturing new business focus is of great significance in profitability. It also enhances
business sustainability as the company gains more income and popularity.
Corporate strategy
Concentration is considered as a strategy in which a company seeks to maintain and focus
on its current businesses (Faulkner, Teerikangas & Richard, 2012). In the case of Bureau of
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 9
Trade, content development, personalization and curation. As opposed to trying to venture into
other businesses, Bureau of Trade can concentrate on excelling in what it does best and thus
enhance performance. This could be achieved through expanding their skills to cover more
regions than they are currently doing, but executing the same business they are currently
performing.
There are several justifications as to why the Bureau of Trade should adopt the
concentration strategy. The first one is that the company already has a significant level of
experience in its area of specialization and this insinuates that it can perform outstandingly if it
continues to pursue the business (Lynch, 2012). The second justification is that concentration
allows a company to have a clear focus as opposed to diversification, such that it can achieve
greater results by investing its resources in promoting perfection.
Conclusion
This discussion effectively establishes that the motive of a merger or acquisition must be
clearly established in order to ensure that the companies involved can gain from the
collaboration. In the cases of eBay and Bureau of Trade, eBay as the main company acquires
Bureau of Trade with an objective of taking advantage of the company’s excellence in content
development suited for their products. This would allow eBay to use the expertise in creating a
better website.
The acquired company may have had various choices in terms of the company to
collaborate with, and Google is considered one of the best alternative company that Bureau of
Trade could have chosen.
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 10
An analysis of corporate and business level strategies reveals that eBay utilizes
diversification as its international corporate level strategy while differentiation is identified as the
international business level strategy. Each strategy serves a valuable purpose in the company’s
performance. With regard to the acquired company, there are various strategies that it could in
enhancing its business. Concentration is suggested as a possible corporate level strategy, to be
achieved through developing the current business; while new business focus is suggested as a
business level strategy, to be achieved through maintaining a similar approach inn trying out new
market areas.
MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES 11
References
Ebay.com
Faulkner, D., Teerikangas, S., & Richard, J. (2012). The Handbook of Mergers and Acquisitions
Oxford Handbooks. London: OUP Oxford.
Google.com
Johnson et al. (2014). Exploring Strategy: text and cases. 10th edn, London, Pearson.
Lynch, R. (2012). Strategic Management, 6th Ed, London: Prentice Hall
