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Why Companies Merge Technologies on a Regular Basis

Can you imagine what your smartphone would be like if multi-touch screens were not available? How useful is the GPS locator in your phone when you’re looking for a friend’s new address? Would YouTube  or indeed Google Chrome be the same if Adobe didn’t develop Flash? Various aspects of technology are often combined with others in order to make a product useful to a certain degree. It is this development that often prompts companies to merge with others. Instead of worrying about patent claims, the merged companies are able to put their collective technologies together in order to make a superior product.

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Individual, But Connected

Many companies that are accumulate by others retain their own business platform while being connected to a merged organization. For instance, Bobby Kotick assisted in the merging of Activision and Vivendi Games in 2008. This created the Activision/Blizzard platform for future development. Instead of forming one company as in an acquisition, the two companies still operate independently while benefiting from each other’s technology. It becomes a symbiotic relationship where both parties reap the rewards by combining the resources and developments each created prior to the merger.

Reinventing the Wheel

Companies often buy out other organizations in order to acquire certain aspects of technology. Instead of spending the time and resources to create that specific development, it can be assimilated by the acquisition. In many respects, this can be far more efficient in order to develop a product as the designs could be time sensitive. A lot of online applications and companies are purchased by larger corporations in order to add the portfolio to the purchaser. This often leads to innovative creations by combining applications in order to enhance the user experience.

Surpassing the Competition

When a larger company purchases a smaller one, patents and technology shift ownership. Depending on the acquisition, this could greatly increase the buyer’s capacity to surpass the competition. Instead of trying to develop various pieces of technology, the buying company has instant access to that which is already working. While the competition could still be smoothing out the edges of products, the primary company may be a step closer to releasing an innovative product sooner. It could also introduce a secondary cash flow especially if the purchased company was profitable when it was a standalone business.

Extensive Shared Resources

Whether a company has been purchased by another or a simple merger takes place, the resources combined can offer greater power in the market. These resources could include marketing strategies and assets, employee talent and organizational popularity. For example: If an unknown shoe manufacturer was to purchase Nike, there is a chance that the buying company would keep the Nike name merely because of the marketing position it has within the global economy. This is aside from the available materials, suppliers and manufacturing techniques that may be incorporated from the purchase as well.

Mergers and acquisitions happen on a regular basis whether they are popular global companies or small businesses in rural areas. They can be beneficial to increase the overall capabilities of the buyer while increasing the revenue stream. If you build a unique business that could benefit a larger one, don’t be surprised if you’re offered an incredible amount of money to sell. You could take an early retirement or try to capitalize on why you’re company has attracted that kind of attention in the first place. It may be a hint of what you could develop instead of selling.

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