The Formation Process of Competitive Advantages

Based on Multiple M&A Strategies

Abstract

The purpose of this paper is to clarify how the M&A (Merger and Acquisition) strategy influence the formation of competitive advantage with a process perspective. M&A is a practical strategy to gain the sustainable competitive advantage. Even though as a result M&A strategy effects on the competitive advantages, rarely in literature can be found a combination of both. To figure out the formation process of the competitive advantage, I conduct a case study of a Japanese firm which gained and strengthened it by multiple M&A strategies. Based on the Resource-Based View (RBV) argued by Barney (1991) and the Five Competitive Forces Model conceived by Porter (1985), I analyze both internal and external environment of the firm in this case. The results show that each of the two theories is not enough to explain the phenomenon under dynamic market environment and the capability dynamics perspective is needed especially relating to the complicated strategy like M&A. I find the multiple M&A experience should be treated a kind of dynamic capability which effects on the competitive advantages.