Strategic Fit in Mergers and Acquisitions: A Case Study of Volvo Cars

Mergers and acquisitions are today very relevant themes in the field of expanding a business organization. There may be different purposes such as rapid expansions, to beat potential future competitors or expand the product depth and range. It can also function as a short-cut to new markets (Eun & Resnick, 2007).

Abstract

Today’s business world hosts a phenomenon, a way to expand business activities by consolidating or buying another company, so called Mergers or Acquisitions (M&As). Within the automotive industry this phenomenon has been seen frequently with examples like the Renault-Nissan, Daimler Chrysler-Mitsubishi and Ford Motor Company-Volvo Cars team ups. The last mentioned is particularly interesting since there have been talks implying Ford to sell Volvo Cars due to a harsh financial position.

Contents

1 Introduction
1.1 Discussion of Problem Area
1.2 Purpose
1.2.1 Research Questions
1.3 Thesis Disposition
2 Background
2.1 History of Volvo Group and Volvo Cars
2.2 History of Ford Motor Company
2.3 Volvo Brand Name
2.4 The Acquisition of Volvo Cars
2.5 The Relationship between Ford and Volvo Cars
2.6 Reasons behind a Potential Sale
3 The Road toward Consolidation
3.1 Mergers and Acquisitions
3.2 Motivations for Pursuing M&As
3.3 Strategic Fit
3.4 Overlapping Model of Strategic Fit
3.5 Corporate Culture and its Impacts on M&As
3.6 Due Diligence – a Pre-M&A Process
3.7 The 4 Cs
3.7.1 Capability
3.7.2 Compatibility
3.7.3 Commitment
3.7.4 Control
4 Information Handling – a Thorough Process
4.1 Research Approach
4.2 Research Strategy
4.2.1 Quantitative vs. Qualitative Strategy
4.2.2 Argumentation for the Chosen Case
4.3 Data Collection
4.3.1 Sample Selection
4.3.2 Sample Responsiveness
4.3.3 Interview Method
4.4 Limitations of Chosen Research Strategy
4.4.1 Telephone Interview Limitations
4.4.2 Qualitative Method Limitations
4.4.3 Bias
4.4.4 Limitations of Chosen Case Approach
4.5 Evaluating the Process
4.5.1 Credibility
4.5.2 Transferability
4.5.3 Dependability
4.5.4 Confirmability
4.6 Data Presentation and Analysis
5 Results
5.1 Introductory Remarks
5.2 Success and Failure cases of M&As
5.2.1 The Renault-Nissan Case
5.2.2 The Mitsubishi-DaimlerChrysler Case
5.3 Brand Reputation Report 2007
5.4 Potential Buyers
5.4.1 BMW
5.4.2 Renault-Nissan
5.4.3 Volvo Group
5.4.4 GAZ
5.4.5 Investment Banks
5.4.6 The “Swedish Solution”
5.5 Interviews
5.6 Summary of the Findings
6 Analysis
7 Conclusion
8 Ending Notes
8.1 Further Research
References
Appendices
Appendix I – Interview Guide and Questions

Author: Scott, Gustav,Stohm, Per,Oxelman, Daniel

Source: Jönköping University

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