External Innovation through Acquisitions in the High-tech Industry.: A Study of Strategic Implications
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Mergers and acquisition (M&A) have been at the forefront of academic research. However, most of the research in this realm focuses on the generic benefits that arise from acquisitions or the challenges that they involve. This paper highlights the use of acquisitions in the high-tech intensive industries (examples include pharmaceuticals, and electronic and communications) as a favorable means of external innovation to maintain competitive advantage. The main objective of this research is to analyze both primary and secondary data, in order to propose the circumstances under which it is strategically advantageous for firms to engage in external innovation through acquisition. The primary data has been collected from interviews with Oracle Corporation, and a current start-up in the high-tech industry. The following conclusion is drawn, that large profitable firms with accumulated and current R&D efforts, can benefit from acquiring smaller private start-ups to remain competitive. The uncertainty in technologically driven environment demands adaptable firm boundaries to continuously improve core competencies, introduce new products lines, and decrease the time to market. The paper highlights the necessity for external innovation because in-house R&D is insufficient to catch all market movements. It proposes a framework for a proper acquisition strategy that emphasizes key aspects of competitive advantages for technology driven businesses.
Place, publisher, year, edition, pages
2013. , 40 p.
Merger & Acquisitions, External Innovation, in-house R&D, Acquisition targets, Strategic implications
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-142899OAI: oai:DiVA.org:kth-142899DiVA: diva2:704781