Cross-border Merger & Acquisition: A Case Study of an Electronic Component Distributor in Taiwan
Date Issued
2004
Date
2004
Author(s)
Wang, Kuh-Ping
DOI
zh-TW
Abstract
Due to many countries are relaxing their economic and trade policies, globalization has become a main stream and an irresistible trend. Amount which, Taiwan enterprises are using a variety of ways to expand their business investment overseas in order to struggle for both business survival and growth. In the recent years, the focus has been on the development of China market, to attract capital funds and many Taiwanese companies move towards to the area. As for the Taiwan electronic components distributors, the pressure from large international components distributors are becoming stronger by leveraging strategic alliance and merger which create the severe competition environment, in addition, the manufactories are moving to other low cost countries. Therefore, invest overseas aggressively is a must-do strategy for the Taiwan electronic component distributors. In it, merger and acquisition （M&A）is the fastest and high controllable method to enter the market.
In order to completely present the practical way of how the enterprises drive the merger, this research adopts Qualitative Research in case study through personal involvement and thorough probe into the real M&A case situation (including before the M&A, during the M&A, and after the M&A) to provide for the Taiwan enterprises as a reference. In addition, prove the related Entry Strategy and M&A theories suitable for the Taiwan enterprises situation.
After individual case interview and secondary data analysis, we found in choosing the Entry Strategy, in addition to Dunning OLI model and Kim and Hwang’s global strategy variables, there are some considerable factors on targeted company CEO’s personal career planning and the supplier’s balance strategy among distributors. Besides, during the M&A process, we propose few key elements to the Taiwan enterprises as references when choosing merger as a method to enter the China market.
Key elements and suggestions are:
1. In a harmonious atmosphere, negotiate for a win-win pricing. If two companies starting to have conflict or cannot get to a consensus in the beginning of the negotiation process, there is a possibility to turn the original corporation attitude into a defensive or hostile situation. Therefore, suggest looking for help from a trust worthy third party, to smooth the situation and negotiate for a price which is benefit for both parties.
2. Emphasize on the division of labor in organization and capabilities on both coordination and cooperation. Because of the market trend, seeking for new product lines and geographically expansion, Taiwan electronic components distributor industry must have the mentality and associated talents to build the capabilities on cross geography operation and to enforce the abilities on organizational division, coordination cooperation, planning, control and execution. Therefore, the enterprises should incubate talents with global perspective in order to assist and complete the tasks within the organization.
3. Building vision, integrate organizational cultures from both parties. During the formal integration stage, there might be some organizational culture conflicts or benefit transfer resulting in increasingly higher hostility which cause the psychological discrimination situation. Therefore, both sides should focus on the fusion of the culture from their own, and try to build the company vision after integration, set mid-range and long-range goals, establish corporative and tolerant organization environment and sense of involvement.
4. Build a real time and accurate international management information system platform. When operate in Great China area, lack of assistants from an instant and precise international management information system, it’s hard to have a good logistics, technical support and resource sharing after the integration. Suggest the international enterprises during the merger process and expanding the business overseas to set up or renew the management information system, search for technical support and budget estimation. By leveraging a good international management information system platform can achieve synergy for multination enterprises.
Subjects
電子零組件通路商
併購
進入策略
Merger and Acquisition
Electronic component distributor
Entry Strategy
SDGs
Type
thesis
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