Manchester United and Japan Tabacco

Manchester United and Japan Tabacco

Chapter 7
Case Study: 7-(Manchester United and Japan Tabacco)
1. How does a cross border acquisition strategy become a critical source of competitive advantage for the United States, United Kingdom, Spanish, Japanese and Indian firms?

It is believed that a cross border acquisition strategy creates competitive advantage for the UK, US, Spanis, Japanese and Indian firms in a way that it would increase capital or revenues of the acquiring firms. As mentioned in the case study, when Japan Tobacco acquires British Tobacco, the Japanese firms in return get an opportunity to build up its overseas capital. This situation happens, especially when the low currency values in European as compared to Japanese yen currency during that time. As a result of that, Japan Tobacco gets opportunities to increase their revenues and financial positions in European overseas.
Other than that, the cross border acquisition strategy gives a competitive advantage for the acquisition firms as it helps to strengthen the acquiring firm position and brand name to the targeted overseas country. For example, when Spain biggest telecommunication, Telefonica acquires numbers of telecommunication companies in Latin America, it obviously not only gives advantages to the acquiring firms to increase their revenues, but it is also one of the ways to strengthen the position of Telefonica in Latin America’s market. So, once the Telefonica hold a strong position in Latin America, then the firms will not have a problem to they want to introduce their new product or services to Latin America in the future.
Also, by doing the cross border acquisition is believed to gives competitive advantages to the acquisition firms in terms of technology handover. According to the case study, Latin American firms purchase the US largest producers of cement. What benefits the Latin American firms is the chances to learn by the technology used by the US cement producers. If the acquired firms used advanced...

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