Acquiring other companies is a growth strategy used by businesses to bring new products or services, talent, and clients under their company umbrella-or to effectively shut down competitors.
Buying out companies can be a risky business, yet Google does it regularly and it seems only to feed its growth. In the last year alone, the search and advertising giant has acquired more than 35 other businesses, swallowing up artificial intelligence, satellite, online advertising, and home monitoring companies, among others.
There's much to consider when you're in a position to bring another company into your fold. The primary considerations are typically financial-are there cost savings to be had? Will it result in an increase in revenue?
The company in the position to acquire another has to be reasonably certain that doing so is part of its sustainable growth plan-that staff retention, customer service, and investor relationships will remain intact.
Acquisitions are complicated, with great risk alongside the potential reward.