From Captivity to Emancipation. A case study of the effects on the acquired firm’s strategic core competence from different post-acquisition integration approaches

Abstract

II Abstract The phenomenon of emerging market firms acquiring Western firms is an ever-increasing one in the World economy of today, often stemming from a desire to acquire knowledge, expertise, and technology, in order to spur the global competitiveness. Compared to Western firms however, which focus on synergy realization, emerging market firms seem to apply a somewhat different approach to the imperative post-acquisition phase. Still, the knowledge considering how they differ and how the acquired firm’s strategic core competence is affected by different post-acquisition approaches is scarce. To study how the integration approaches practiced by Western and emerging market firms differ in the post-acquisition phase and how they affect the acquired firm’s strategic core competence, Volvo Car Corporation and its New Product Development department is studied through a series of 10 interviews, held with senior management at the headquarters in Gothenburg, Sweden. Thereafter, the empirical findings are analyzed with extant theories on post-acquisition integration, new theories on emerging market firms, as well as the implications for New Product Development. The main findings suggest that Western firms practice a tight and swift approach to post-acquisition integration, which hampers the acquired firm’s strategic core competence, as the focus of the acquired firm shifts towards realizing synergy effects, rather than leveraging on its strategic core competence. On the other hand, emerging market firms practice a more loose and slow moving approach to post-acquisition integration, which instead spurs the strategic core competence, as the acquired firm is given the opportunity to fully focus on its own strategy and development.