BUS2207 : Multinational Management AY2022-T4
Written Assignment – Unit 7
University of the People
UNIT 7: Case study: Growing a Company by International Acquisition
Question One
Aquisition and Innovation are the two different ways in which a company can grow.
Growing through Acquisition: An investment in a rapidly expanding start-up business. This is
an opportunity for the firm to develop further due to the increased availability of venture
financing and financial resources from IPOs (initial public offerings). Secretlab is a Singaporebased manufacturer of gaming seats. Their official seat for the League of Legends (LOL) game
tournament was announced in January 2019. The company's popularity has expanded to over 60
countries, and in an effort to help Secretlab expand, Temasek Holdings subsidiary Heliconia
Capital has agreed to invest between SGD 200 million and SGD 300 million in the firm.
Heliconia now has a small investment in Secretlab and is able to hire more employees to help
with the company's growth strategy thanks to the collaboration.
Growing through Innovation: Some businesses have grown rapidly and gained a competitive
edge by being astute and responding to client demand through innovation. Automated
technologies are integrated with real-time performance data and an extensive network of prescreened applicants on Workmate's platform. Recruiting, onboarding, and scheduling are just a
few of the services they provide, but they also analyze employee time and attendance to create a
report on their performance.
Question Two
Businesses grow when they have the resources to expand and opportunities exist for
growth. Explain how the acquisition of Berendsen provided such a good opportunity for
the Davis Service Group.
For the most part, Davis Service Group has only operated in the United Kingdom, and if they
want to grow their business, they need to go internationally, particularly in the European Union
(European Union). As a bonus, it's literally just a few steps away. In order for Davis Service
Group to be successful in the European Union, it makes more sense for the firm to either expand
into the EU with one of its own goods or to purchase a company whose products and services are
comparable to Davis’s, but which is financially disadvantaged. European-based business
Berendsen is trying to make ends meet. Berendsen, like Davis' Sunlight brand, dominates the EU
textile services industry in multiple nations (Poland, Germany, Sweden, Norway etc). Davis
Service Group and Berendsen can benefit from a horizontal merger that leverages Berendsen's
network and expertise. To begin with, they cut costs by shutting locations where there were
already two Berendsen’s. There is no need for Berendsen to rely on a central headquarters
because Davis already has an effective management structure in place. In addition, Berendsen
can continue conduct its company and keep a tight rein on its sales and profits without having to
rely on Davis. Berendsen’s brand and Davis Service Group's entry into the EU market will allow
them to expand their textile market dominance further.
Question 3
What aspects of European Union markets have particularly encouraged horizontal growth
of the Davis Service Group? What aspects of European Union markets have particularly
encouraged organic as opposed to inorganic growth?
The 27-nation European Union (EU) is a fertile ground for development. The single European
market allows goods and services to move freely, making it easier to conduct business inside the
EU if you have a European branch. Firms who are just getting started in the EU can also take
advantage of the EU's skilled labor market. The Euro is the single currency used by the EU in
trade. A British company like Davis Service Group would benefit from the fact that English is
the most widely spoken business language in the European Union (EU). Inorganic growth, on the
other hand, refers to a company's purchase of another company. Berendsen's acquisition makes
more sense for organic growth because both firms are at the textile production stage at the same
time. When it comes to shopping patterns and culture, Berendsen has a lot in common with
Sunlight. As a result, by leveraging one another's current resources, existing businesses will see
an increase in turnover. Neither Davis nor Berendsen will be able to break into the EU market
without the other. Starting a new firm in Europe is easier for Davis since he has access to an
already-existing business in the continent.
Question 4
If the company were to expand into new areas of the globe, where would you recommend
and why? What factors might encourage or discourage this choice?
The products and services that a company is providing determine whether or not the firm should
expand its operations to other countries. Singapore and Hong Kong would be ideal locations for
a financial services company wishing to develop in Asia. Both nations are recognised as
financial hubs, and their political stability, particularly in Singapore, makes them ideal locations
for expanding a financial firm. Interested international investors can take advantage of
Singapore's 24+ Free Trade Agreements in products, services, and financial services.
References
Yun Ting, C (Aug 13, 2019) Straits Times. Temasek's Heliconia to invest millions in local
gaming chair company Secretlab. https://www.straitstimes.com/business/temaseks-heliconiatoinvest-millions-in-local-gaming-chair-company-secretlab
Business Inquirer (Jan 18, 2022) Business Inquirer. Savvy, innovative firms top fastest growing
company list in Singapore. https://business.inquirer.net/339020/savvy-innovativefirms-topfastest-growing-company-list-in-singapore#ixzz7NOONAYN1