Strategic Management Essay Example | Topics and Well Written Essays - 1500 words - 12

Strategic Management - Essay Example The most controversial acquisition of Patrick by toll Holding in Austrilia though through acrimonious court cases is to improve the losistic effecieny of the company and the industry, technically align it with supply chain management and improved customer responsiveness. The acquisition was aimed to invest in future infrastructure, increase industriy syngeries, leverage scale of economics, improve competitive positioning and thereby reduce operational and management costs. The business of airlines being very volatile and Toll’s competitor having the majority shareholding in Virgin Blue,overcapacity in the shipping business and problematic rail business it was difficult for Toll to establish a firm foothold toward leadership position in the logistics industry. Toll had only two alternatives to either to merge with some bigger international transport company to achieve its strategic goal or acquire related business of high standing to get business opportunities to expand further and consolidate its position. Toll had the vision to get advantage by acquiring Patrick but still there were several internal risk involved. Whether the acquisition would generate synergy and integrated cost saving. Whether investment in an aging infrastructure of Patrick corporation would prove productive or turn negative in future. Will the acquisition build competitive advantage for Toll’s business in the logistic industry. Patrick corporation themselves needed to be reorganized and restructured with injection of massive funds of $1.1 billion to stablize. These were challenging questions for the leadership to answer. However, the oportunity in the industry after acquisition was great to hold about 15% of the market share with the revenues of both the transport giants that was about $5.1 billion in 2005. This market share would transform them to formidable position in the domestic and international transport and storage market. Toll and Patrick both had