The companies I’ve selected for the purpose are Apple which is more into the manufacturing industry and Facebook which is into a virtual industry. Both of these companies are trying to enter into new industry segment and in an attempt to improve the product/service they offer for which even with a solid R&D team, they’ve spent a lot on the acquisition. That strategy for them seems to be working well.
Let’s look at Apple first. As of today, they’ve acquired 99 different companies, not all are a success but the ones successful has made Apple be the first company to touch the trillion dollar valuation and one of the strong market player. Apple’s biggest acquisition has been of Beat’s electronics in August 2014 for $3 billion (Steele, 2014). This acquisition helped the company enhance their audio devices including the headphone, phone speakers and also with a strong team on the company they acquired, they used the same talent to also develop solutions for Apple which improved the overall quality of their product. In late, 1997, Apple acquired NeXT to bring back Steve Jobs back in the company and it contributed significantly in the Mac OS X, iOS, tvOS, watchOS, and even the macOS. Their acquisition of PA Semi, a semiconductor company provided them with those patents to use the same for iPhone (Krazit, 2009). The company acquired a company called Siri which actually is now included as the feature in Apple by the same name, and is a very popular addition. Further, their acquisition of Authentic provided them to dive into biometrics in their handheld devices while C3 Technologies helped them to compete with google maps. They also showed their intent to dive into AI world with the purchase of Turi in late 2016 (Kumparak, 2016). All those acquisitions for Apple added value in a way or other helping them enhance the features in the products that they develop. If they had moved ahead with a mission to develop all those, it would have been a very long process of R&D, development, testing, validation and all but with a finished product, they can bypass most of those steps and bring it into action much quicker. That is very necessary as the world is moving fast thus it has helped Apple remain as the top company in its category.
Facebook, on the other hand, has used the acquisitions to kill their competitors or also in a way to accelerate their growth. The major acquisition of WhatsApp for $19 billion can also be considered as killing off the competition as this messaging app was quickly hitting the 500 million users and was on a way towards hitting 1 billion with daily new users being 1 million (Facebook, 2014). Their own application running - Facebook messenger used added group feature after the acquisition of Beluga and their group messaging application (Siegler, 2011). That shows that they have used their acquisitions to add services to their already existing product. With the world slowly moving towards virtual reality, Facebook acquired Oculus for $2 billion and intends to use it to change the current dynamics of social networking dramatically (Zuckerberg, 2014). In addition to that, they’ve also acquired Pebbles Interfaces and the rights to use gesture control - their patented product for $60 million to aid the VR aspect. The company also acquired photo-sharing company Instagram for $1 billion. With that both the platforms could use features from each other’s platform and benefit with it. You can see facebook identifying faces in photos someone else has posted of yours and alert you even if you’re not tagged, this is thanks to their acquisition of Face.com for $100 million. All those shows that with every acquisition, the company is being stronger. Even if the company doesn’t have 100% success in the acquisitions they’ve made, it has all helped the company to gain an accelerated growth and enter into a new segment of the market. All those have helped open new door and reach to larger mass which is crucial for the company trying to connect the world.
That is how both these companies are using the acquisition strategy while gaining a competitive advantage.
Siegler, M. (2011). Facebook Acquires Group Messaging Service Beluga In A Talent AND Technology Deal. Retrieved from techcrunch.com/2011/03/01/facebook...
The companies I’ve selected for the purpose are Apple which is more into the manufacturing industry and Facebook which is into a virtual industry. Both of these companies are trying to enter into new industry segment and in an attempt to improve the product/service they offer for which even with a solid R&D team, they’ve spent a lot on the acquisition. That strategy for them seems to be working well.
Let’s look at Apple first. As of today, they’ve acquired 99 different companies, not all are a success but the ones successful has made Apple be the first company to touch the trillion dollar valuation and one of the strong market player. Apple’s biggest acquisition has been of Beat’s electronics in August 2014 for $3 billion (Steele, 2014). This acquisition helped the company enhance their audio devices including the headphone, phone speakers and also with a strong team on the company they acquired, they used the same talent to also develop solutions for Apple which improved the overall quality of their product. In late, 1997, Apple acquired NeXT to bring back Steve Jobs back in the company and it contributed significantly in the Mac OS X, iOS, tvOS, watchOS, and even the macOS. Their acquisition of PA Semi, a semiconductor company provided them with those patents to use the same for iPhone (Krazit, 2009). The company acquired a company called Siri which actually is now included as the feature in Apple by the same name, and is a very popular addition. Further, their acquisition of Authentic provided them to dive into biometrics in their handheld devices while C3 Technologies helped them to compete with google maps. They also showed their intent to dive into AI world with the purchase of Turi in late 2016 (Kumparak, 2016). All those acquisitions for Apple added value in a way or other helping them enhance the features in the products that they develop. If they had moved ahead with a mission to develop all those, it would have been a very long process of R&D, development, testing, validation and all but with a finished product, they can bypass most of those steps and bring it into action much quicker. That is very necessary as the world is moving fast thus it has helped Apple remain as the top company in its category.
Facebook, on the other hand, has used the acquisitions to kill their competitors or also in a way to accelerate their growth. The major acquisition of WhatsApp for $19 billion can also be considered as killing off the competition as this messaging app was quickly hitting the 500 million users and was on a way towards hitting 1 billion with daily new users being 1 million (Facebook, 2014). Their own application running - Facebook messenger used added group feature after the acquisition of Beluga and their group messaging application (Siegler, 2011). That shows that they have used their acquisitions to add services to their already existing product. With the world slowly moving towards virtual reality, Facebook acquired Oculus for $2 billion and intends to use it to change the current dynamics of social networking dramatically (Zuckerberg, 2014). In addition to that, they’ve also acquired Pebbles Interfaces and the rights to use gesture control - their patented product for $60 million to aid the VR aspect. The company also acquired photo-sharing company Instagram for $1 billion. With that both the platforms could use features from each other’s platform and benefit with it. You can see facebook identifying faces in photos someone else has posted of yours and alert you even if you’re not tagged, this is thanks to their acquisition of Face.com for $100 million. All those shows that with every acquisition, the company is being stronger. Even if the company doesn’t have 100% success in the acquisitions they’ve made, it has all helped the company to gain an accelerated growth and enter into a new segment of the market. All those have helped open new door and reach to larger mass which is crucial for the company trying to connect the world.
That is how both these companies are using the acquisition strategy while gaining a competitive advantage.
References
Facebook to Acquire WhatsApp. (2014). Retrieved from newsroom.fb.com/news/2014/02/faceb...
Krazit, T. (2009). Apple acquires low-power chip designer PA Semi. Retrieved from cnet.com/news/apple-acquires-low-p...
Kumparak, G. (2016). Apple acquires Turi, a machine learning company. Retrieved from techcrunch.com/2016/08/05/apple-ac...
Siegler, M. (2011). Facebook Acquires Group Messaging Service Beluga In A Talent AND Technology Deal. Retrieved from techcrunch.com/2011/03/01/facebook...
Steele, B. (2014). Apple acquires Beats Electronics for $3 billion. Retrieved from engadget.com/2014/05/28/apple-acqu...
Zuckerberg, M. (2014). Facebook acquires Oculus VR. Retrieved from facebook.com/zuck/posts/1010131905...