M&A Vodafone/Mannesman - Case Study Example

Even though, Mannesman denied the offer initially, finally they were forced to accept it after analyzing all the possibilities and prospects. The pressure from shareholders and the fluctuating climate in the business world encouraged Mannesman to accept the offer. Vodafone succeeded in reducing competition in European market through this deal and they were able to concentrate more on other markets after the merger with Mannesman. Globalization and liberalization have revolutionized the business world.

Competition is becoming tough in every areas of business and it is difficult for even big organizations to survive in the market if they fail to implement suitable business strategies to counter the competition. It is easy for organizations to do business in any country they want because of globalization. Outsourcing and offshoring are some of the major business strategies adopted by organizations in order to exploit the overseas market. On the other hand some organizations use merger and acquisition like business strategies to expand their wings in overseas countries.

The recent global recession has broken the back bone of even biggest organizations and it is extremely difficult for them to survive without taking appropriate business strategies. Bruner (2004) has mentioned Merger and Acquisition (M&A) as the popular mean by which companies responding to changing business conditions (Bruner, 2004, p.3). Organizations realized that their resources and abilities alone may not be enough to compete effectively in the globalized market. Gaughan (2007) explained M & A as a process in which two corporations combined together to form a single one.

Moreover, only one corporation survives after the M & A while the merged corporation goes out of existence after the merger process (Gaughan, 2007, p.12). Telecommunication sector is one of the major business areas in which M & A is taking place