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Microsoft, Amazon, IBM: Do M & As affect innovation?

Posted by: Reena Jana on July 29, 2009

“What role do mergers and acquisitions play in your company’s innovation strategy?” We asked this question in our annual Most Innovative Companies survey this year, conducted with Boston Consulting Group and sent to 3,000 executives around the world. In the light of this week’s stream of M & As, in which three big acquirers all appeared on our list — Microsoft (#4), IBM (#6), and Amazon (#11), it’s timely to share the data we gathered on this topic.

The conclusion: personnel are not the targets or used as consultants in mergers and acquistions. In other words, companies don’t tend to buy other companies for people. Instead, it seems that those who do engage in M & As as part of their innovation strategy — and many companies do not — do so to gain access to new customers for existing products they have developed themselves.

In our survey, we found that 29% of those polled said that M & As don’t play a significant role in their company’s innovation strategy. But the same percentage said that they look to buy businesses that give access to new markets where they can sell their existing offerings.

In comparison, 19% said they look to buy businesses whose leaders and staff have demonstrated the consistent ability to innovate. This was the least popular answer.

So: what role do M & As play in YOUR company’s innovation strategy? How do you think the Microsoft-Yahoo, Amazon-Zappos, and IBM-SPSS deals will affect both the acquirers’ and targets’ creativity?



What comes next? The Bloomberg Businessweek Innovation and Design blog chronicles new tools for creativity and collaboration, innovation case studies in both the corporate and social sectors, and the new ideas that have the power to change the way things have always been done.

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