Asahi Glass Co.: Diversification Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Acquisition Strategy

The acquisition strategy that Asahi Glass Co. should adopt for the future should be consolidated in order to improve competitive behavior. This strategy will serve effectively for Asahi Glass Co. because the company will be able to compete in the severely competitive market which will obviously lead to price competition. In this industry, price behavior will not be an effective way to gain lower prices or to grab a market share in the industry where Asahi has been competing.

Potential Candidates

The recommended acquisition strategy as proposed above is to consolidate in order to improve competitive behavior. The reason for it to be recommended is that since Japanese market is becoming highly skilled and competitive in electronic industry it is necessary for Asahi to develop a strategy with the firms on the basis of improving upon the competitive behavior. As for now, the situation is quite tough and intense and the rival firms such as Samsung, Toshiba, and LG are gaining edge with the technology features therefore, it is necessary to have a go on the competition by analyzing competitive behavior. The four potential candidates for Asahi to develop merger and acquisition are Mitsubishi, Komag, Advanced Display Inc., and Glaverbel.

Risk Analysis

Out of the four potential candidates for the M & A, the idea of Glaverbel is least preferred and most risky. It is risky because Asahi Glass is already a leader in the industry, merging with another firm will only make it lose the market share and the profits will have to be distributed. This is the main risk because eventually the domination will be divided. Therefore, the idea to work with Glaverbel is not recommended. Secondly, merger and acquisition with Advanced Display Inc. and Mitsubishi will also not work in the favor of Asahi Glass in the long run because both these companies are not technologically advance enough to meet the requirements of the fast growing electronic segment of Japan. Therefore, the association with a low profile company can in fact back fire in the long run for Asahi Co. The ideal or the least risky move for Asahi Co. is to develop merger and acquisition with Komag; this is because Komag has developed a strong brand name with technology it has been offering to the customers. Once, Asahi and Komag can develop an association it will benefit the company with their future decision making.

Recommended Decision

Out of the four potential candidates that have been discussed in the case, Komag presents the added value or the technology which the industry generally requires to excel and meet customer demands. This is the most feasible option for Asahi because the most obvious strength it might give to the company is of developing thin film disk drives. It is expected that since the industry is at growth and the rivals are competing on technology it is therefore, a recommended strategy for Asahi to develop merger and acquisition with Komag and become a part of companies that become a part of diverse industry. In the end, it can be said that the decision to align with a small firm with the desire to grow can actually lead the company towards success as well as it can bring the best out of both Asahi and Komag...............................

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