An ice cream manufacturing company is facing problems in distribution and wants to buy its competitor Ice-cream company which has a good distribution system.

Questions:

1. Which business strategy is used by this company? 

2. What are the critical issues in this strategy? 

3. What are the Training Implications of this strategy?

Solution:

1. Which business strategy is used by this company? 

The business strategy used by the ice cream manufacturing company in this scenario is known as acquisition or mergers and acquisitions (M&A). By acquiring its competitor, the company aims to gain access to its well-established distribution system and integrate it with its own operations.

2. What are the critical issues in this strategy? 

The critical issues involved in this strategy can include:

• Financial considerations: Acquiring another company requires a significant financial investment. The ice cream manufacturing company needs to assess whether it has the financial resources to purchase its competitor and manage the costs associated with the acquisition.

• Integration challenges: Merging two companies involves aligning different processes, systems, and cultures. Ensuring a smooth integration between the ice cream manufacturing company and its acquired competitor may pose challenges, such as differences in distribution practices, workforce integration, and potential resistance to change.

• Regulatory and legal considerations: Acquisitions often require approval from regulatory authorities to ensure compliance with antitrust laws and prevent monopolistic practices. The ice cream manufacturing company needs to navigate the legal and regulatory landscape to successfully complete the acquisition.

• Market reaction and competition: Acquiring a competitor may lead to market reactions and increased competition from other ice cream manufacturers. The company should carefully analyze the potential impact on market dynamics and customer preferences.

3. What are the Training Implications of this strategy.

The training implications of this strategy will primarily revolve around the following areas:

• Change management: Employees from both companies will need to adapt to new systems, processes, and potentially new roles. Training programs can be developed to facilitate a smooth transition, helping employees understand the changes and acquire the necessary skills to operate in the new integrated organization.

• Cultural integration: The ice-cream manufacturing company and its acquired competitor may have different organizational cultures. Training initiatives can focus on fostering a shared culture, values, and norms, promoting collaboration and cooperation between the employees of both companies.

• Distribution system training: As the ice-cream manufacturing company aims to leverage the acquired competitor's distribution system, training programs can be designed to educate employees on the new distribution practices, logistics, and supply chain management. This can help ensure that the distribution system is effectively utilized to improve the company's overall distribution capabilities.

• Communication and stakeholder management: Effective communication is crucial during and after acquisition. Training can be provided to employees on effective communication strategies, stakeholder management, and addressing concerns or resistance from various stakeholders, both internal and external.