Core Competencies-oriented M & A Research

In the present background of economic globalization, Chinese companies are facing dual competitive pressures from both inside and outside. In this condition, many companies use M&A as an effective method to expand quickly. However, the success rate of M&A is very low. So, how to improve the success rate of M&A in our country is becoming an important problem needed to study. It is a new analysis method for M&A to use core competence theory. In the opinion of this method, the reason of the low success rate of M&A is that those M&A are not oriented by core competence.According to the common principle of core competence's building and extending, an M&A analysis frame oriented by core competence is built. In this frame, a hypothesis of interrelationship on M&A and core competence is raised as the core viewpoint of this thesis-when buying company lacks core competence needed by development, M&A is used to transfer core competence from selling company to buying company to build up its core competence; when buying company has a core competence, the fundamental purpose of seeking profit maximization will spur it uses M&A to extend this core competence to selling company. Based on this hypothesis, three key steps of M&A oriented by core competence are analyzed afterwards.In light of the theory discussed before, the thesis proposes an M&A strategic plan process oriented by core competence as the guide of M&A practice. In the process, an "industrial attraction-core competence" matrix is put forward to choose specific M&A strategy, and two variations of this matrix are analyzed particularly. At last, the thesis uses this process to analyze a case of M&A based on core competence.