A Model of M&A: Lessons from IBM’s Acquisitions and Divestitures
In this chapter, Matsumoto seeks an appropriate non-Japanese example in which an M&A has been used to achieve sustained profit growth in the United States. He finds that IBM is an ideal model for Japanese companies considering overseas acquisitions. The author highlights the need for Japanese companies to improve profit margins. He compares the growth and choices of IBM and Fujitsu over the same 10-year period to identify how IBM has achieved growth. Matsumoto gleans three key approaches from this comparison that would be useful for Japanese companies to follow: Keeping an eye on the denominator (ensuring that low-profit business segments are not draining higher-profit segments), acquiring business “clusters” (businesses that complement one another), and having a CEO’s long-term strategy commitment (over a 10-year period).
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