VFC is a strong company with good financial position, but growth has been sluggish. In expanding, we have considered acquisition of UA, which I consider good investment because they deal in fitness equipment which relates with our clothing, sportswear, and sports gear (VFC). We will save the effort of developing a new product line. This will be a strategic fit in a number of ways, such as economies of scope, resource sharing, improved efficiency, and differentiated customers.
UA has an impressive customer base, its financial position is good, and it has working business plans (Plank). We can therefore focus on profit making. UA’s product range and quality are proven by sales worth $3 billion in 2014. We can save on marketing costs if we work with UA’s model. We will not be testing new products because they are already in the market. We will inherit experienced workers, who can also help us with insights into the company. UA deals in a line of products that is related to ours, and therefore complements our chain of distribution.
In the technology strategic fit, UA’s can be synthesized with ours to improve both companies’ R&D, and speed up deliveries. In manufacturing-related fit we can combine our diversified experiences and expertise to reduce costs. We will also share sales and marketing strategies and marketing budget, especially UA’s model that has enabled them grow well. Joint distribution will enable better performance than when each distributes solely, and we will share transport and storage facilities to retailers. The company will differentiate the market using both our marketing skills. Our diversified products will increase our range of market in economies of scope and competitive advantage strategic fit, especially by also leveraging on well-known brands to drive the lesser-known brands. The competitive advantage for our company will be felt through profitability, gains in share value, and sharing of valuable assets. Each side will contribute its strengths to the overall business, resulting in more shareholding value than if we just increase portfolio.
Works Cited
Plank, Kevin. Kevin Plank At 2012 Entrepreneurship Invitational. 2012. Web. 16 Dec. 2015.
VFC. “VF Corporation (VFC)”. N.p., 2015. Web. 16 Dec. 2015.
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