Oracle Corporation is a multinational computer technology company based in Redwood City, California, the United States of America. The company develops and markets both computer hardware and enterprise software. It is ranked as the world’s largest producer of database software, earning the third place in the globe in terms of sales of software. The focus of this paper is to discuss the ways Oracle Corporation seeks to create value for its acquisitions and the corporate-level strategy based on these ways.
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Oracle’s Ways of Creating Value from Its Acquisitions
The corporation has been on the trend of acquiring leading software companies and creating value on these acquisitions using several ways. One of these ways is hastily introducing the characteristic competencies into the acquired companies. This is expanded by introducing a new range of products into already existing ones, offered by the acquired companies. Oracle ensures that thus, the old customers are retained, and new ones are attracted. The corporation raises the standard of the existing products to be able to compete with the World’s leading corporate applications software marketer, Germany’s system analysis, and program development (SAP).
Oracle Corporation seeks to create value from its acquisitions by melding or bundling the best software applications of the acquired companies. This is coupled with the company’s first class software programs. Thus, the company is given an advantage of creating new integrated software that enables organizations to perform all their managerial duties together. Such undertaking is geared to create value to its acquisitions.
Oracle creates value from its acquired companies by allowing the Chief Executive Officer, Ellison, to adopt and use the best of the technologies from its acquisitions. This helps put up a fresh collection of up-to-date corporate software applications, hence, value creation.
Another evident way that Oracle is using to create value to its acquisitions is the customer involvement in productions. This action helps the corporation to seek and know how packages are to be made and what is to be included in them. The Vice-President of the corporation is expected to meet regularly the customers of the acquired companies in order to gain their input into the type of software package that Oracle should produce. Wookey, the Vice-President of Oracle, formed an advisory council of major and leading customers to ensure that the ultimate package meets the customer’s needs.
Lastly, Oracle is committed to maintaining the top rate software engineers from its acquisitions. The executives and engineers who do not perform well in the recent past are fired. This ensures that only the top achievers are maintained in the organization hence, value addition to the products.
Corporate Level Strategy of Oracle Acquisitions
Oracle Company has laid proper corporate level strategy in line with the acquisitions it has made. Strategic decisions have been put into the effect and direct procedural methods, established to ensure the acquired companies are of value to Oracle. Oracle has used several ways to increase the value which it has created from its acquisitions, as discussed. It is clear that used corporate level strategy is of horizontal integration.
Horizontal integration involves acquisition of supplementary business actions at the equivalent level of value series. This can be done in the course of mergers and acquisitions of firms producing related products and services. Oracle Company has spent much money in acquiring leading software companies through the decision of top managers. The CEO, for example, spent $19 billion at the start of the year 2005 to acquire fourteen top suppliers of corporate software. The corporation acquires the software companies bringing them under their ownership. They, then, maintain the products and introduce new ones expanding their market.
Oracle Corporation has indeed several ways of creating value to its acquisition. This, added to its corporate level strategy of horizontal integration, has made the company gain dominance and the reputation that it currently enjoys. Thus, the company is considered successful in its acquisition and operation procedures.
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