The Strategic Fit

Can fit different sizes

The Strategic fit is thought to be the decisive factor during mergers and acquisition; however, Barkema & Schijven (2008) argues that strategic fit creates synergistic potential to integrate the acquired firm and this integration will enable the acquiring firm to realize the full benefit of the acquisition. Barkema & Schijven (2008) argue that firms start their acquisition by conducting a local search which results in a good integration but not the best.

Repeating the same acquisition process leads to ineffective organization that requires organizational restructuring to optimize its synergy with the acquired firms. “Acquisition experience enables an acquirer to learn to carry out its acquisitions more successfully from the start, thereby postponing the need for restructuring.” (Barkema & Schijven, 2008, p. 697).

Barkema, H., & Schijven, M. (2008). Toward unlocking the full potential of acquisitions: the role of organizational restructuring. Academy of Management Journal, 51(4), 696-722.

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Speeding Taxi

Few weeks ago I was in Qatar attending a conference. I stayed in one of the top hotels which was a bit expensive when compared with the prices in the surrounding countries.  I noticed, without exception, that taxi drivers in Qatar are speeding as if they are in a race. The way they change lanes and accelerate is unnecessary, and when you ask them to slow down they will respect your wish but will go back to their speeding routine as if it is an old habit they can not drop.

My last trip to Washington DC

Snow in DC

Snow in Washington DC (December 2009)

My last trip to Washington DC was successful except for the unexpected snow that recorded the highest snowfall in the 140 years record. I chose Qatar airways as the choice carrier and was glad that I did so. They have friendly, professional, and dedicated staff serving you in a well maintained new aircrafts. Some of you are wandering about the price; well… it is 50% less that United Airline for the same flight.

Dulles airport closed the night before my return flight but was luckily opened 12 hours before my boarding time.

Old English law

BooksOld English law supported the “caveat emptor” principle where the buyer is accountable for researching the product and take responsibility for the product risk (Ellison, 2008). This principle is not practical in the resent year since the buyer cannot test the car safety or performance without driving it for extended period, the same test would be required before flying in an airplane (Ellison, 2008). A good example of such unknown risk is the use of Radio-frequency identification RFID in many products. RFID is an embedded device that transmit the location of the device (or whatever it is attached to) to a receiver or a reader (Willey, 2007). The receiver would know where the tag has been and this information can be analyzed and used for marketing and product customization purposes. The customers might benefit from receiving an advertisement related to their buying habits but in exchange for their privacy.

Willey, L. (2007). RFID and consumer privacy: let the buyer beware! Journal of Legal, Ethical & Regulatory Issues, 10(2), 25-37.

Caveat Emptor “let the buyer beware”

Let the buyer beware

Inks, Avila and Chapman (2004) found that buyers are more ethically sensitive to unethical behavior. Buyers have stronger negative reaction to lying when this lying was from the seller; however, the buyers were less sensitive to their deceit (lying) because they justify it with the resulting low price. Old English law supported the “caveat emptor” principle where the buyer is accountable for researching the product and take responsibility for the product risk (Ellison, 2008). This principle is not practical in the resent year since the buyer cannot test the car safety or performance without driving it for extended period, the same test would be required before flying in an airplane (Ellison, 2008). A good example of such unknown risk is the use of Radio-frequency identification RFID in many products. RFID is an embedded device that transmit the location of the device (or whatever it is attached to) to a receiver or a reader (Willey, 2007). The receiver would know where the tag has been and this information can be analyzed and used for marketing and product customization purposes. The customers might benefit from receiving an advertisement related to their buying habits but in exchange for their privacy.

The principle “let the buyer beware” is opposite to the relationship marketing principle where the seller seeks long lasting relationship with the customer. The relationship is maintained by stating the facts and giving the necessary information to the customer. Relationship marketing takes part of the risk to prevent any risk that the buyer may encounter from the selling and buying experience. “The relationship marketing strategies are concerned with the development and enhancement of relationships with a number of key markets.” (Šimberová, 2007, p. 207). Marketers should not subscribe to the caveat emptor principal since it makes the relations ship between the seller and the buyer deteriorate.

Ellison, R. (2008). Time to revisit caveat emptor? What has regulation ever done for us? Pensions: an International Journal, 13(3), 123-129.

Inks, S., Avila, R., & Chapman, J. (2004). A comparison of buyers’ and sellers’ perceptions of ethical behaviors within the byer-seller dyad. Marketing Management Journal, 14(1), 117-128.

Šimberová, I. (2007). Internal marketing as a part of marketing culture supporting value for external customer. Economics & Management, 12, 470-280.

Willey, L. (2007). RFID and consumer privacy: let the buyer beware! Journal of Legal, Ethical & Regulatory Issues, 10(2), 25-37.

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Customer retention

The sky will be clear soon

Gustafsson, Johnson and Roos (2005) stress that customer retention have three drivers which are customer satisfaction, calculative commitment and affective commitment. Customer satisfaction comes from product quality and service quality which is supported by price fairness. Calculative commitments come from the lake of choice or the high cost associated the switching products or services. Affective commitment is strengthened by the customer involvement with the company that eventually results in trust and commitment (Gustafsson, Johnson, & Roos, 2005). Chiung-Ju and Wen-Hung (2008) listed different tactics the retailers use to enhance customer loyalty which branch from financial, social and structural bonding activities. Financial bonding includes discounts and interest rate. Social bonding is the relationship created between the two parties during a business interaction and follow up interactions (Chiung-Ju & Wen-Hung, 2008). The final tactic is structural where the organization set up rules, policies and procedures to structure its relationship with the customers.

Chiung-Ju, L., & Wen-Hung, W. (2008). Do loyal and more involved customers reciprocate retailer’s relationship efforts? Journal of Services Research, 8(1), 63-90.

Gustafsson, A., Johnson, M., & Roos, I. (2005). The Effects of Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on Customer Retention. Journal of Marketing, 69(4), 210-218.

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