In the last few years, the world of business has changed immensely and it is no longer possible to keep our company at its original state. Business could expand or shrink, depending on market conditions. Mergers and acquisitions are common words in modern business community. In many cases, traditional competitors are joining their efforts through mergers to handle new challenges in the market.

Acquisitions could also bring new horizons to businesses, especially in rapidly-changing industries. As an example, Microsoft’s decision to purchase Nokia is an excellent example of business expansion. The software giant is facing threats from mobile software platforms that allow users to perform various light computing tasks. Consequently, consumers no longer need to use expensive, full-fledged Windows operating systems on computers to browse the web and play casual games.

The company has released the Windows Phone operating system and it is using Nokia as a bridgehead in the highly competitive mobile industry.

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Businesses that face challenges from emerging new markets and technologies may consider acquiring other businesses to gain expertise that they don’t have. This allows them to survive the onslaught of new products.

Older businesses like Microsoft may do well in its original industry, but experiences show that we can’t stay too long in an area of business. In fact, Nokia faced significant decline in market share due to its reluctance to adopt new trend in the industry. While other phone makers gain profits through the use of Android operating system, Nokia stayed with the outdated Symbian operating system and its switch to Windows Phone failed to bring satisfactory results.

This means, Nokia had lost its market share permanently. We could learn from this scenario that businesses may consider that their own products are outdated and unsalvageable. If Nokia quickly adopted Android, it could still become successful at the top of Android market.

However, we should be aware that there are a number of ill-advised forays and acquisitions. This could happen when business try to enter a completely unfamiliar market and this could simply a waste of resources and time.

Business expansions can do wonder to the development of our organizations. They can provide extra impetus to our company to do well in our current field or a few other related fields. We can get a sense of well-being and confidence when confronting new challenges. The end result should be reflected well in our balance sheet. When companies open new departments of branches after an acquisition, productivity level usually increases.

This also provides companies with additional opportunities to complete tasks. Customers could also get a sense of confidence, because they know that the company is able to handle many more things at once. Somebody in the company will be able to complete tasks that were previously impossible to achieve. It is better to spend a huge amount of money for acquisitions than seeing our business flounders due to its inability to compete with new entrants in the market.

About: Author is an employee of reputed seo services company. He’s likes blogging on internet marketing, small business tips and Finance.