There’s nothing more complex and daunting in business than mergers and acquisitions. As all business leaders strategize to edge over the competition, they see international markets as an opportunity to expand.
A Wells Fargo survey discovered that 87% of American businesses feel that international expansion is the key to their long-term sustainable growth. Furthermore, many Chinese-owned companies leverage the acquisition approach to expand their market share in specific industries or enter new global markets.
The process of effectively executing a merger or acquisition is lengthy and involves several phases. However, they offer many advantages for your international development.
Lucrative New Markets
Indeed, a merger or acquisition will save time and money compared to creating a company from the ground up. Developing countries provide excellent growth markets for businesses that want to gain a brand name in the market and their client base.
The Small Business Administration of the United States reported that 96% of the world’s consumers reside outside the U.S. Getting a grip of these new emerging markets for your products and services is an ideal way to expand.
Diversify Your Resources
Two heads are better than one. Combining the resources and talents of both organizations will diversify your options. Furthermore, it helps safeguard your bottom line from unanticipated occurrences. It can also counteract bad outcomes from one location and focus on areas with good revenues. Hence, the international market can help them maintain a healthy income stream. Mergers and acquisitions provide scope efficiencies that aren’t always available with organic development.
Doubled Financial Capacity and Market Influence
Power outlasts those who didn’t have it. Mergers and acquisitions provide greater financial power and influence over the competition. Hence, it gives more control over the market prices and creates new income resources.
In today’s competitive business landscape, having the appropriate connections and tie-ups is critical to eliminate bottlenecks and endless price wars.
Cost Savings on Expansion
Mergers and acquisitions are considered cost-effective for development and expansion. The acquired company has production, storage, and processing facilities in their area, so you don’t have to think about additional expenses. Furthermore, some countries give financial incentives to mergers and acquisitions to keep the business afloat.
Many governments all across the world provide tax breaks when a company merges or acquires another company. Other countries offer exemptions from manufacturing and transportation taxes to international businesses. It’s a trend among Asian countries, specifically in Singapore.
High-Caliber Global Talent Pool
Merger and acquisition involve retaining your human resource without any interference. It means that your workforce will get to collaborate with the newly merged enterprise. The retention of employees and their integration into the new company may be part of the agreements. Furthermore, the diversity of your international workforce will benefit the organization on its expansion. Hence, you can tap into global talent pools.
Moreover, it provides businesses with distinct advantages such as improved productivity, advanced language diversity, and impressive educational and work backgrounds.
Olivia Yu has decades of experience in the Human Resources industry. She’s the Regional Director for Asia Pacific of a famous international HR company. Olivia’s international experience inspires her to write articles about human resources and global staffing.