Reference no: EM132835192
Read the overview below and complete the activities that follow.
Once a company has settled on which of the five generic competitive strategies to employ, attention turns to what other strategic actions it can take to complement its competitive approach and maximize the power of its overall strategy. One such decision is whether to bolster the company's market position by merging with or acquiring another company in the same industry. In this activity you will examine the merger and acquisition strategy of Live Nation, a live entertainment and e-commerce company.
Mergers and acquisitions are much-used strategic options to strengthen a company's market position. A merger is the combining of two or more companies into a single corporate entity, with the newly created company often taking on a new name. An acquisition is a combination in which one company, the acquirer, purchases and absorbs the operations of another, the acquired. The difference between a merger and an acquisition relates more to the details of ownership, management control, and financial arrangements than to strategy and competitive advantage. The resources and competitive capabilities of the newly created enterprise end up much the same whether the combination is the result of an acquisition or merger.
Merger and acquisition strategies typically set sights on achieving any of five objectives:
1. Extending the company's business into new product categories
2. Creating a more cost-efficient operation out of the combined companies
3. Expanding a company's geographic coverage
4. Gaining quick access to new technologies or complementary resources and capabilities
5. Leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities
Perform an Internet search on Live Nation and Ticketmaster on each company's website (https://www.ticketmaster.com, https://help.ticketmaster.com/relationship-between-live-nation-and-ticketmaster/, and https://www.livenationentertainment.com)
Live Nation (https://www.livenations.com) operates music venues, provides management services to music artists, and promotes more than 29,500 live music events annually. The company merged with Ticketmaster and acquired concert and festival promoters in the United States, Australia, and Great Britain. Live Nation owns, operates, has exclusive booking rights for, or has an equity interest in 222 venues, including House of Blues ® music venues and prestigious locations such as The Fillmore in San Francisco and the Hollywood Palladium. Over the past few years, the company has been aggressively acquiring entertainment companies globally that complement their existing businesses. Their most recent acquisitions include acquiring a stake in Rock in Rio in South America, the second largest grossing festival in the world, and acquiring a majority stake in Red Mountain Entertainment, one of the premier regional concert and festival promoters in the United States. How has the company used horizontal mergers and acquisitions to strengthen its competitive position? Are these moves primarily offensive or defensive? Has either Live Nation or Ticketmaster achieved any type of advantage based on the timing of its strategic moves?
Additional information can be found by searching "merger between Live Nation and Ticketmaster" on websites such as Huffingtonpost.com, Reuters.com, New York Times (nytimes.com), and Economist.com.
Has either Live Nation or Ticketmaster achieved any type of advantage based on the timing of its strategic moves? Explain.