Which Type of M&A Makes an Acquiring Restaurant Firm a Star? Profit-Driven Versus Growth-Driven M&A

This study identifies whether profit-driven or growth-driven mergers and acquisitions (M&As) are more beneficial to a restaurant firm aiming to achieve profitable growth after an M&A. The results indicate that despite the challenges that must be overcome to achieve profitable growth through...

Full description

Saved in:
Bibliographic Details
Published in:Cornell hospitality quarterly 2022-08, Vol.63 (3), p.369-384
Main Authors: Mun, Sung Gyun, Koh, Yoon, Jang, SooCheong (Shawn)
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Business growth
Hospitality industry
Profitability
Restaurants
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This study identifies whether profit-driven or growth-driven mergers and acquisitions (M&As) are more beneficial to a restaurant firm aiming to achieve profitable growth after an M&A. The results indicate that despite the challenges that must be overcome to achieve profitable growth through M&As, profit-driven acquiring firms are more likely to have better post-M&A operational performance than growth-driven acquiring firms. Therefore, this study suggests that when restaurant firms seek to grow their business through M&As, they should pursue this goal after achieving higher operational profitability, along with better cost controls, supply management, and marketing strategies, rather than optimistically adhering to growth strategies before accumulating any internal, market-based competitive strengths.
ISSN:1938-9655
1938-9663
DOI:10.1177/1938965520979174