Enterprise M&a On Core Competence

Enterprises should continuously develop and grow to survive in the fierce competition in the market. As usual, enterprises have two ways to develop and enlarge themselves: First, based on the accumulation of capital within the enterprises. Second, through corporate mergers and acquisitions, enterprises rapidly expand the scales of capital and realize leap-style development. During researching Enterprise Growth Path in the United States, the well-known American economist Stigler (GJ Stigler) said:"There is no one major American company is not through some degree, some form of M&A grows up, and almost no large companies relied mainly on internal expansion to grow up."Seeing from the growth of enterprises, the corporate mergers and acquisitions can bring enterprise multiple performance compared with enterprises'internal capital accumulation.Since the 1990s, a new round of corporate mergers and acquisitions boom has been set off at the global level. Major merger cases crops up one after another. Compared with previous waves of M&A, this merger wave has many different characters. It is obvious to show that more and more enterprises will closely combine the construction of the core competence with enterprise M&A. As for Chinese enterprises, it is very important to concern about that.Generally speaking, there are two basic models for the core competence of enterprises: First, self–develop and build enterprise core competence; Second, merger and acquire some enterprises with expertise, or establish a strategic business alliance with those enterprises with their own advantages. Compared with constructing the core competence of enterprises by self-development, enterprises have the characteristics of immediate acquisition, availability and low cost.According to the core competence of enterprises, analyzing the wave of the M&A of the global enterprises these years, it is obvious that many enterprises are trying building a new, higher level core competence through M&A to achieve lasting competitive advantages. The new features occur in the fifth wave of the global corporate mergers and acquisitions, with the economic information, and the speed of the process of globalization, enterprises increasingly fierce competition between enterprises, in order to achieve their own survival and development; we must have certain competitive advantages. How can the competitive advantages of enterprises form? More and more facts have shown that the enterprises competitive advantages do not come from external market forces, but from some factors within enterprises themselves. It is on this basis that building and enhancing the core competence of enterprises to gain a competitive advantage has drawn more and more enterprises attention. Although it requires time to search for some resources and knowledge of acquisition and reorganize the resources, to build their core competence, it is much faster to construct the core competence than to make it through self-development. As for knowledge and resources belonging to a particular enterprise, M&A have become the only way for enterprises to gain them.In recent years, in the temptation and promotion of the capital operation and low-cost expansion, China's enterprises also rise to an M & A craze. But many M&A businesses are too often valued more the expansion of the scale, but are lack of real understanding of the real objective of this acquisition by strengthening the core competence, so some enterprise M&As seem to have the"big"appearance, but they can't form the core competence at all. This expansion lacking of core competencies of scale can not be lasting like a"bubble". The idea of"strengthening"highlights while"enlarging"should become our new business ideal.This paper mainly used the following research methods: through normative analysis, based on theory and the related theory, this thesis mainly illustrates the relationship between M&A and major goal of its acquisition, actively collects the cases at home and abroad for the demonstration. Second, this paper analyzes with some merger cases. Through typical cases of acquisition, it illustrates that the objectives of the merger should be gradual. This study involves the theory of acquisition, the core competence and the relationship of M&A and core competence, and etc. This paper uses methods of standardized analysis and case analysis, and sticks to the principle of emphasized focuses and overall balance.Thesis can be divided into six parts:I. The first part presents the background and the significance of this thesis as well as the way of research.II. The second part proposes general theory of merger, and recalls the situation of China's M&A. Thus the essence of M&A is to improve the core competence.III. The third part introduces the general theory of the core competence, and presents relationship between core competence and acquisition by analyzing how to build and upgrade the core competence.IV. The fourth part focuses on interrelationship between mergers and acquisitions and core competence.V. The fifth part introduces the corporate mergers and acquisitions strategy mode based on the core competence, and sets an example on how the core competence develops in practice.VI The sixth part makes a summary.The innovations are the following:First, this thesis takes the M&A and core competence as a whole to study and provides guidance for the acquisition. Second, this paper gives an example of the success for the Group to illustrate that the merger cases should be achieved step by step, and warns those enterprises that it is impossible for them to expand through blind acquisition.