Establishing a value-creation model on mergers and acquisitions: an integrated strategy approach
Authors: Stacy Huey-Pyng Shyu
Journal: Chiao Da Management Review. Jun. 2014, 34(1): 117-139.
Keywords: e-Business process reengineering; Merger and acquisition; Competitive advantage; Value creation; Operation fit
Abstract:
The aim of this article is to emphasize strategic business process reengineering perspective to better
understand the sources of value creation in acquisitions. Moreover, an integrated approach embraces conceptual
viewpoint with resource based view, relational approach, and Porter's five forces are employed as a guideline
for managers to formulate value-creation models aligned with strategic e-business process reengineering
projects when pursuing M & A strategies. A qualitative research is employed to explore the business scenarios
which involved the inference of an integrated strategy theory derived from a detailed M&A case study. The
approach of this paper is to state a comprehensive strategy formulation process guided by three sections: a
case study to show the importance of value creation via operation fit between acquiring firm and acquired
firm, business process reengineering initiative, and integrated application of the strategic business
reengineering to create value in pursuing M & A strategies. Finally, the leading company outperforms among the
competitors in terms of market share and global brand creation. To develop sustainable competitive advantage,
executives must understand the true nature and mechanisms which drive the organization fit process, value
creation through M&As and the consequent reengineering projects (such as e-projects to facilitate the
knowledge sharing) for enhancing the post-merger performance and sustaining the company's competitive
advantage. The originality of this study is to propose an integrated strategic approach for corporate mergers
and acquisitions. Managers need to understand the sources of value creation in acquisitions derived from
strategic points-of-view and what they mean for B2B (Business-to-Business) management performance. This
justifies the need for better guidelines for operation fit through examination organizational value creation
in M&A (Mergers & Acquisitions) context in response to a complex business environment in mature industries, as
well as the key strategic elements when formulating business and technical BPR (Business Process
Re-engineering) aligning with strategic fit. The discussion also raises awareness regarding the importance of
strategic logic, correct interpretation of integrated strategic concepts and guidelines to business practice.