Introduction
The increased level of globalization and internationalization has created an opportunity for mergers and acquisitions. In a global market, a company is required to have strong financial muscle to spread out its significance to more countries and remain competitive in the market. However, the main challenge is to establish its market share in a new environment without being native to that business environment. Therefore, in most cases, multinational explore mergers or acquisitions to ensure that they are able to establish a strong market share to a foreign market using an already established company operating in the same region. Conversely, this approach is applicable in justifying failure or success of a particular company through is corporate decision to merge or be acquired by another organization. Here, an organization that has merged or acquired another small company is set to benefit from an expanded working relationship with other players in the same industry. For example, AT&T joined forces with T-Mobile 3 years ago and this has propelled the company to become a giant in the wireless carrier business. Accordingly, the tactic helped the company to win competition over its bitter rival and giant Verizon Wireless. However, Publix Super Markets, Inc. has expanded its business within the US, but it can benefit from merging or acquiring other organizations in the international market.
A merger is a strategy developed by two or more organizations that come together and exploit the goals that can be created by pulling together their resources. The decision to enter into a merger can be necessitated by the pitiable feat of the organization or the urge to expand its international presence. Similarly, an acquisition is a strategic decision undertaken for one company to completely take control of another organization through being the majority shareholder or a complete purchase of the organization (Aloa, 2010). Using the merger between AT&T with T-Mobile, this study will reveal that the influence of this acquirement to the global business-rank and corporate-state policies of the latter is an ideal proof for Publix Super Markets, Inc. to expand its activities and profit revenues via a union or an acquirement. Additionally, the analysis will advocate the company to unite with Bi-Lo Superstores that it can benefit from elaborate company and business–state policies.
AT&T Union with T-Mobile
The increased dominance of the wireless market by Verizon Wireless prompted AT&T to come together with T-Mobile in 2011 to achieve a financial muscle to compete. This strategy was beneficial to T-Mobile because it was able to benefit from the acquisition through obtaining the stocked value of the former. Here, its debts were reduced and the company had a better chance of reviving its performance in the market. The business-level strategy initiated by AT&T Company was to advance its network and coverage so that they would achieve a high level of success in the ‘Long Term Evolution’ technology operation (Worthman, 2012). Consequently, the wireless industry is significant for the success of AT&T because its competitive advantage is created through manufacturing new devices that provide fresh appliances for the buyers in the marketplace.
Alternatively, T-Mobile was struggling with debts because of their reducing value of stocks and they required a merger to salvage their corporate success. As such, merging with AT&T that had a good stocked value in the market was an ideal strategy for the organization to rejuvenate its activities in the wireless industry. The basic services offered by the organization before the merger were texting, voice mail and offering bonus minutes during the weekends so that they would attract their customers (Worthman, 2012). This strategy reduced their competitive advantage because they failed to focus on improving their network, which their rivals had improved over time. As such, they lost their competitive advantage because the customers focused on new technologies in the market. The arrival of the wireless technology proved to be a disastrous invention for T-Mobile because they had good business, but this was severely affected after other companies adopted this technology.
Maintaining a marketplace leading position in the technology industry requires elaborate policies to promote innovations. This was the major failure of T-Mobile because they believed they would maintain their business performance through their basis services, but this was not the case as they began losing reputation immediately the wireless technology was introduced. Here, the customers required better technologies and cheap data strategies that were not offered by T-Mobile. However, the increased loss of customers in the market prompted the company to formulate new strategies to compete in the era of wireless devices, but it was very late. The main rivals like AT&T, Verizon, and Sprint had upgraded their services and were offering their customers with new technologies coupled with superior wireless internet data (Worthman, 2012). Conversely, T-Mobile started to regain its market share after it decided to offer new technologies and wireless data. Strategically, they could not compete for the 3G network, but instead they develop the 4G network to have a slight competitive advantage. This proved to be successful for the organization but competition was fierce again after other companies adopted the same technology. Therefore, the survival approach for companies in the wireless industry is to provide new technologies that are satisfying the customers’ preferences.
The merger provided a major benefit for AT&T because this was significant in making the organization as the largest wireless conglomeration in the US. In addition, T-Mobile was a fierce competitor and through the merger, they were able to avoid such an intense competitive environment. As such, the company has been able to maintain a high level of competitiveness because they are able to provide coast effective plans, mobile phones and limit the provision of a contract plan. The corporate strategy of the company to operate as a prepaid company enabled the company to provide unrestricted plans at considerably low costs, which is a strategy to attract customers. Thus, both AT&T were ideal in establishing a merger because they developed into a large outstanding company in the wireless industry that would enable them to offer plans at cheaper prices to develop a competitive advantage.
Publix Supermarkets Corporation
The business strategy of this company is to expand its subsidiaries within the US to ensure that they have a larger market. Their major market segments in the US are Florida, Alabama, and Tennessee among other cities (Publix Super Market Inc., 2012). The organization deals in a variety of services like operating a grocery, selling foods, beauty care, pharmacy and general merchandise. Here, the company reaches to its customers through country wide marketed and non-public marked products alongside the unbranded commodities (Publix Super Market Inc., 2012). These products are sourced from different destinations, but they are transported to the stores via its established distribution centers and directly to suppliers. Based on the above example of a merger, Publix Super Markets should identify a similar organization in the industry to merge so that it can develop its competitive strategy.
Bi-Lo Supermarket is the ideal company for the merger because both companies compete within the same industry. There are various advantages that the companies will achieve and benefit from the merger because of the economies of scale provided by a large company. For example, through the union, the resulting company will have the capability to attract more customers through the provision of discounts and coupons because of their increased financial muscle. Here, the merger will leverage the relationship of the two companies and their customers because it will provide a basis for providing better and quality services that are ideal in satisfying the consumer demands and preferences. Another factor for the two organizations to consider a merger is because successful competitors in the sector have merged in the past and have achieved high levels of performance. Therefore, through the merger, both companies will be able to promote their sales and revenue expansion because of an expanded market share because of an expanded market segment and increased competitiveness.
Global business-state and corporate-rank policies
An international business-level strategy involves a corporate strategy of using the available resources and capabilities to ensure it develops its activities into foreign markets (Hitt et al., 2013). For example, Apple Inc. has explored the global market through using China has its greatest manufacturer. This has enabled the company to provide its products to a larger market. Therefore, as an international business level strategy, AT&T can expand its products through merging with other companies in China to manufacture its products because it will be cheap. This will boost its geographical coverage and increase its sales revenue. In addition, AT&T can promote its international-level strategy through developing a free application for its customers that will maintain communication to the customers about its services and products. In contrast, the global business-state and commercial strategy for Publix Super Markets Inc. could be to develop its goods as well as services to a global market. With increased globalization, exploring a global market will promote a larger market for its products. Similarly, the company will be able to achieve its resources from other countries at cheaper prices that can develop a competitive advantage through lowering it prices and giving discounts. In addition, the company should change its corporate strategy in order to compete with other companies in the global market through reducing its prices and free applications for its customers. Other organizations impose a fee on their application to check the information and this can be beneficial for Publix Super Markets Inc.
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References
Aloa, R. (2010). Mergers and acquisition. European Journal of Social Sciences, 15(4), 112-19.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and cases: Competiveness and globalization. Mason, OH: South-Western Cengage Learning
Publix Super Market Inc. (2012 August 22). Market Data. Retrieved from:
http://markets.ft.com/Research/Markets/Tearsheets/Business-profile?s=PUSH:QBB
Worthman, J (2012 August 26). AT&T in $6.7 Billion Loss on Failure of T-Mobile Deal. The New York Times. Retrieved from: