Business Policy and Strategic Management Research Paper

Business Policy and Strategic Management - Research Paper Example The author of the paper states that growth is the way of life. Almost all organizations plan to expand. This is why expansion strategies are the most popular corporate strategies. Companies aim for sustainable growth. A growing economy, burgeoning markets, customers seeking new ways of need satisfaction, and emerging technologies offer ample opportunities for companies to seek expansion. Apart from competitive strategies, competition could coexist with cooperation. Corporate strategies could take into account the possibility of mutual cooperation with competitors while competing with them at the same time so that the market potential could expand. Cooperative strategies could be of the following types: 1. Mergers 2. Takeovers (or Acquisitions). 3. Joint Ventures & 4. Strategic Alliances.  Merger and takeover (or acquisition) strategies essentially involve the external approach to expansion. Basically two, or occasionally more than two, entities are involved. There is not much diffe rence in the three terms used for such types of strategies and they are frequently used synonymously. But a subtle distinction can be made. While mergers take place when the objectives of the buyer firm and the seller firm are matched to a large extent, takeover or acquisitions usually are based on the strong motivation of the buyer firm to acquire. The takeover is a common way for acquisition and maybe defining as "the attempt (often spring as a surprise) of one firm to acquire ownership or control over another firm against the wishes of the later management (and perhaps some of its stockholders). Joint ventures occur when an independent firm is created by at least two firms. In an era of globalization, joint ventures have proved to be invaluable strategies for companies looking for expansion opportunities globally. Strategic alliances are partnerships between firms' whereby their resources, capabilities, and core competencies are combined to pursue mutual interests to develop, man ufacture or distribute goods or services. Organizations follow the growth paths can be pursued via external expansion and mergers are the most popular measures. In this case (Merger) the business does not create the productive facilities itself, but purchases existing production. A merger is a situation in which, as a result of the mutual agreement two firms decide to bring together their business operations. A merger is distinct from a take over in so far as a takeover involves one firm bidding for another's shares. One firm thereby acquires another. A merger implies that managers through negotiation have reached an agreement acceptable to both sides. Mergers provide a much quicker means to growth than internal expansion. Not only does the firm acquire new capacity, but also it acquires additional consumer demand. Building up this level of consumer demand by internal expansion might have taken a considerable length of time.