Mergers and Acquisitions by Olimpia Meglio & Svante Schriber

Author:Olimpia Meglio & Svante Schriber
Language: eng
Format: epub
ISBN: 9783030404598
Publisher: Springer International Publishing

4.3.4 Strategic Fit or Just Fit?

What appears underrepresented in strategic fit research is the dynamism that competitors often provide. In general, the level of competition can range from relatively leisurely acting industry actor behavior, akin to a ‘live and let live’ approach, to cut-throat rivalry (Porter, 1980). Research into competitive retaliation in the competitive dynamics tradition (Chen, 1996) suggests that M&A are competitive moves and as such are expected to be met with other competitive moves. If not, there is not much competition, making the need for strategy questionable in the first place. Consequently, emphasis is placed on how M&A can provide the participating firms with benefits that cannot be easily competed away or ‘stolen’ by surrounding firms (King & Schriber, 2016; Uhlenbruck, Hughes-Morgan, Hitt, Ferrier, & Brymer, 2017).

In consequence, M&A research has been criticized for focusing too much on degrees of similarity, and too little on how benefits from similarities, differences, or complementarities, offer benefits in a dynamic competitive environment. While pre-conditions are central independent variables in this research, relatively little interest is given to how such conditions play out in the competitive environment (Lien & Klein, 2006). Specifically, while resource and market overlaps are important, they leave relatively little room for what is generally considered central in the ongoing, dynamic and often unexpected processes that call for a strategy (Schriber, 2015), leaving open the question if focus in research has been placed too much on the internal fit, rather than the underlying competitive effects of M&A.

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