MSG Amazon Company Potential Growth Speech Paper Follow the questions and write a speech paper for 5 mins base on my paper…..Actually, you could just sum
MSG Amazon Company Potential Growth Speech Paper Follow the questions and write a speech paper for 5 mins base on my paper…..Actually, you could just summary my paper which has much relationship with questions. And make it be a speech paper. Running heads: MERGERS AND ACQUISITIONS
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Project 3: Merger and Acquisition Opportunity
Merger and Acquisition Opportunity
Introduction
Mergers and acquisitions are some of the most common business expansion strategies. A
merger is a situation in which two or more business operations combine their resources to pursue
a common business goal without losing their shareholding or ownership. While there are many
MERGERS AND ACQUISITIONS
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instances where mergers lead to the formation of new entities and shedding of their existing
entities, there are also many instances where the business organizations come together to pursue
common objectives without losing their identities. On the other side, an acquisition is a situation
where a business organization buys a majority stake or all the states in a business so that it takes
over the management of the business. There are many benefits that business organizations
obtain from the use of mergers and acquisitions. One of them is that a business is likely to enjoy
the reputation that is enjoyed by the other organization. Additionally, the use of these approaches
prevents business organizations from going through the legal challenges that are associated with
establishing operations in a new environment. However, there are also challenges that are
associated with this approach. One of the challenges is that just as the process allows a business
organization to enjoy the good reputation of an organization, similarly, the business will be in a
position to inherit the negative reputation of the business organization being acquired and
merged. This paper examines Amazon, the online retail giant, and its possible acquisition.
Amazon is the biggest and most profitable online retail business in the world. While appreciating
its command in the market, it is necessary to appreciate the fact that there are other regions
where the company has not managed to enter. By using this expansion approach, Amazon is
highly likely to succeed in its business growth.
Amazon
As indicated in the introduction, the firm that has been selected for evaluation of possible
acquisition. While Amazon is a company that offers online retail services, it is classified as a
technology company, largely due to the fact that its services and operations rely on technology.
In 1994, Jeff Bezos started Amazon as an online marketplace for books. It was a platform where
individuals could buy books and wait for them to be supplied to their homes. As the market reach
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of the company expanded, it became apparent to the management that there was a huge demand
for the delivery of other products. Some of the products included electronics, food, and furniture,
among others. So fast has the growth of Amazon been that by 2015, it had surpassed Walmart as
the most valuable organization on the basis of market capitalization. While Amazon provides
other services such as Artificial Intelligence assistance, it is necessary to note that many people
only recognize the company for its retail services.
As of the 9th of April 2020, the net worth of Amazon had exceeded $1,000 billion
(Macrotrends, 2020). That is incredible. It may even sound unreal. By 2018, Amazons market
share in the United States e-commerce market was 49% (Lunden, 2018). The implication of this
is that Amazon is the largest online retail business organization, not only in the United States but
also in the world. In 2017, in its desire to improve its stake in the food market, Amazon acquired
Whole Food Market for $ 13.4 billion. This was quite a statement from Amazon. The company
indicated that as long as an acquisition is likely to serve its strategic interests, it is capable of
splashing money to make the acquisition. It is possible for Amazon to venture into acquisitions
as a way of improving its business.
Should Amazon adopt a vertical or horizontal acquisition?
Horizontal and vertical acquisitions are the two types of acquisitions that Amazon needs
to consider in its quest to acquire a business. The horizontal acquisition is the type of acquisition
where a business acquires another business organization that is its direct competitor and is at an
equal level of production. On the other side, vertical acquisition is a type of acquisition where a
business acquires another organization that is not its direct rival and is below its level of activity.
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It is necessary for Amazon to go for vertical acquisition. Firstly, horizontal acquisitions are
expensive and usually take time to conclude. Ordinarily, it is difficult to convince a direct rival
that has an equal level of activity to sell its business. That route barely delivers success. On the
other side, the vertical acquisition allows an Amazon to negotiate in a situation where it has more
power and influence than the other party. Besides, this venture is usually less expensive than a
horizontal approach, but it fulfills the strategic objectives of an organization.
Candidates for acquisition for Amazon
There are several firms that may fulfill the strategic objectives of Amazon that it can
acquire. The following is a list of some of these organizations;
Netflix
Netflix is a digital media company. It is involved not only in the movie streaming
business but also in the production of digital content. Netflix is not a direct competitor of
Amazon, but it fits within Amazon’s business objectives. In the United States, Netflix controls
85% of online streaming services (Iqbal, 2020). In the recent past, Amazon has been involved in
film production, and its acquisition of Netflix may play an important role in enhancing its
development in this direction.
Everlane
Everlane is an online clothing store that majorly operates in San Francisco and New
York. In the recent past, Amazon has enhanced its distribution of clothing, and the acquisition of
Everlane will improve the operations of Amazon in this area (Nolter, 2018). Everlane is
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immensely popular in these two regions, and Amazon may use this to advance its activities in the
clothing industry.
Wardy Parker
Wardy Parker is an online retailer for prescription eyeglasses. The New York-based
company majorly makes sales from its website. Individuals make orders for their glasses on the
website, and the company delivers the glasses to them wherever they are. It is incredibly
important to note that in the recent past, Amazon has ventured into the distribution of medical
supplies. This organization has a huge reputation, and Amazon is likely to benefit massively
from its business networks.
Best candidate
Netflix, by far, represents the most suitable company for Amazon’s acquisition. While
Netflix is not a direct competitor of Amazon, it, however, fits within Amazons business
objectives. Amazon needs to continue engaging aggressively in online movie distribution
services. Netflix has a significant market presence, and Amazon may use this to make sure that it
successfully operates in this sector. In the United States, Netflix controls 85% of online
streaming services, and this presents an important avenue for Amazon to enhance its presence in
the movie industry. While this acquisition may be costly, there is no doubt that this venture will
deliver success to the company. In its acquisition of this company, Amazon may use cash. The
reason for this is that Amazon has enough cash reserves to invest in this venture. The same way
it bought Whole Food Market, Amazon could use cash to purchase the business.
Conclusion
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Mergers and acquisitions are some of the most common business expansion strategies. A
merger is a situation in which two or more business operations combine their resources to pursue
a common business goal without losing their shareholding or ownership. While there are many
instances where mergers lead to the formation of new entities and shedding of their existing
entities, there are also many instances where the business organizations come together to pursue
common objectives without losing their identities. In its acquisition, Amazon may use the
vertical acquisition to acquire Netflix. This approach is usually less expensive than a horizontal
approach, but it fulfills the strategic objectives of an organization. Amazon needs to continue
engaging aggressively in online movie distribution services. Netflix has a significant market
presence, and Amazon may use this to make sure that it successfully operates in this sector.
References
Icbal, M. (2020). Netflix Revenue and Usage Statistics (2020). Retrieved from
Netflix Revenue and Usage Statistics (2024)
Don't use plagiarized sources. Get Your Custom Essay onMSG Amazon Company Potential Growth Speech Paper Follow the questions and write a speech paper for 5 mins base on my paper…..Actually, you could just sumJust from $13/Page
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Lunden, I. (2018). Amazons share of the US e-commerce market is now 49% or 5% of all retail
spending. Retrieved from https://techcrunch.com/2018/07/13/amazons-share-of-the-us-ecommerce-market-is-now-49-or-5-of-all-retail-spend/
Macrotrends. (2020). Amazon Net Worth 2006-2019 | AMZN. Retrieved from
https://www.macrotrends.net/stocks/charts/AMZN/amazon/net-worth
Nolter, C. (2018). Amazon Could Look to Put These Companies Into Its Shopping Cart in 2019.
Retrieved from https://www.thestreet.com/investing/companies-amazon-might-buy-in2019-14811124
Project 3: Individual Project
Making a great acquisition!
You work as an investment banker for a prestigious investment bank. The recent
market crashes convinced you that there are good opportunities of Merger and
Acquisition in the stock market. Therefore, you decide to conduct research to identify
such an opportunity:
1. In your favorite industry, identify a firm with strong growth potential and solid
financial strength.
2. For this firm, you would like to find a great target firm to acquire.
a. Is it better to pursue a vertical acquisition and a horizontal one for this
firm?
b. Identify a few promising candidate firms as potential targets. How are
those firms fit in terms of products/services, comparative advantages,
management, and financial performance?
c. Select the best candidate and propose a financing strategy for this
acquisition. Do you plan to pay the target firms shareholders with cash,
stocks or a combination of both? Are you going to finance the
acquisition by issuing additional shares or by borrowing money from
banks or issuing bonds?
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