Growth Through International Acquisition Case Study

Growth Through International Acquisition

This paper will discuss and examine international acquisitions as a way to grow a business. I will use the, Times 100, case study; Davis, Growing a Company by International Acquisition as a guide for analysis. First, I will describe the two major ways to grow a company; organically by increasing the companies turnover rate, and inorganically by acquisitions. Secondly, I will be analysing the acquisition of Berendsen by the Davis Group that is examined in the case study. Thirdly I will be investigating options within the European Union for the Davis Group to grow horizontally, including any organic options available. Finally, I will discuss the options available to the Davis Group for expansion
Mergers, acquisitions, and joint ventures are examples of inorganic growth. Inorganic growth increases the size of assets immediately with an expanded market share and customer base, but is also a greater risk. If company cultures are not blended effectively inorganic growth can fail, and what was intended to benefit a company can end up hurting it. Mergers are when two companies join voluntarily two companies decide to become one, with economies of scale both sides of the merger can help the new entity to grow. Acquisitions are like mergers but with one company being purchased and integrated into the other. When two companies work together but do not merge into one they are involved in a joint venture often involving specific projects for a limited time, joint ventures require communication skills to succeed (EY Voice, 2014, January
Most likely the United Kingdom will be required to renegotiate trade deals with the European Union. The establishment in Europe of a foreign firm is a good idea. Europe is still a dynamic market with potential for growth and further expansion, Latvia and Lithuania are countries that hold a strong attraction for the Davis Group. The Baltic states are located near many of the current countries that the Davis Group has already established themselves with the acquisition both Latvia and Lithuania are within reach of the company’s facilities in Poland and Sweden. Both countries have shown impressive growth rates in the last couple of years and are projected to continue to grow. I feel that Latvia and Lithuania are excellent candidates for organic growth by the Davis growth. If linen hire companies in these countries present themselves for acquisition then I would recommend it as a quick way to enter the local markets in these countries (World Economic Forum,