Strategic Management Case: Barracuda's Acquisition Strategy in Detail

This case study examines Barracuda's strategic decision to enter the home furnishings industry through acquisition. It highlights the rationale behind this approach, emphasizing the competitive landscape and the advantages of acquiring existing players. The analysis suggests that acquisition is the most effective strategy for Barracuda to establish a strong foothold, given the established presence of other companies. The study outlines guidelines for Barracuda's acquisition strategy, including assembling a capable team, conducting thorough target research, developing a comprehensive plan, and finalizing deal pricing and financing. It also identifies potential threats, such as increasing online shopping trends and low unemployment rates, and recommends contingency plans to mitigate these risks. Ultimately, the case underscores the importance of careful planning and execution for a successful acquisition strategy in the competitive home furnishings market.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the Student
Name of the University
Author Note

1STRATEGIC MANAGEMENT
Table of Contents
Answer to Question 1......................................................................................................................2
Answer to Question 2......................................................................................................................3
Guidelines for Acquisition Strategy of Barracuda.......................................................................3
References........................................................................................................................................6

2STRATEGIC MANAGEMENT
Answer to Question 1
After the analysis of the given landscape in the current case study, it can be stated that the
acquisition strategy can be described as the most crucial strategy for the company at the given
stage. This is because it has been observed that there are various players present in the furniture
industry at the current point of time and thus, due to this reason, it is important for the business
to acquire the best ones of them (Hitt, Ireland & Hoskisson, 2012). If the company wants to
ensure that it would like to establish itself in the furniture industry, it needs to understand that
due to the established of the previous companies, it would not be able to meet up with the current
competition and would end up converting the given venture in a loss. Hence, it is primarily
suggested that acquisition may be described as the best strategy which is available to the firm
and will enable them to expand into the given industry.
There does not existing any overcapacity or controlling problems with the United States
home furnishings firms and most of them have good managers. This is another reason why
acquisition can be stated to be a logical technique (Robson, 2015). As these managers are very
capable, they will be able to manage the companies well with the guidance of Barracuda.
The supply chains are also highly concentrated and for this reason, the company can
establish itself into the chosen industry with this market entry mode.
Some other advantages of the acquisition mode are as follows:
 It will help Barracuda to gain access to capital. When the company will take acquisition
of another company, their capital can be accessed and used accordingly.

3STRATEGIC MANAGEMENT
 It will help the company to gain access to knowledge sharing and expertise which will
then go a long way in assisting the firm to become a large player in the chosen industry
(Hill, Jones & Schilling, 2014).
 It will help the company to gain fresh ideas and perspectives regarding working in a team
together and assistance and achieving objectives (Agarwal, 2003).
 It serves as an encouragement to grow and build in the long run.
For these reasons, Barracuda`s acquisition strategy in the industry is a fairly suitable one.
Answer to Question 2
Guidelines for Acquisition Strategy of Barracuda
Keeping the history of Barracuda in mind, the given strategies and guidelines need to be
adhered to by the company:
Assembling a team: As the home furniture industry is highly concentrated, the company would
be required to ensure that it assembles a capable team who would be researching into the
dynamics of the given industry. This research would go a long way in assisting the firm to
understand the requirements of the industry and where the gap is present.
Initiating appropriate Target research: Without an appropriate research technique, the company
will not be able to identify the gap. Gap identification is very crucial in the US Home Furniture
industry and therefore, it becomes considerably important to analyze which companies are
profitable enough to be taken in as an acquisition and how the dealings will be carried out
(Corwin, 1997).

4STRATEGIC MANAGEMENT
Development of a Plan: After the targeted firms will be identified, the company needs to ensure
that they develop a plan which needs to be followed in order to ensure that the work is done
appropriately.
Pricing the deals: The deal of the acquisition with the chosen company needs to be finalized. All
aspects of the company must be covered in the deal.
Financing: The financing of the deal needs to be finalized. Barracuda needs to ensure that it
ensures a fair deal with the company.
Threats faced by Barracuda for entering in the industry
As stated earlier, the furniture industry in which Barracuda plans to invest in is highly
concentrated with several small players. There exists high competition in the given industry.
Furthermore, the trend of e-commerce shopping has also increased which will then contribute to
a fall in the demand of the companies working in the stores.
The following threats will be faced by the company while entering through acquisition:
 Due to the increase in online shopping, the consumers these days prefer to shop online
instead of visiting the physical stores
 The local unemployment rate is very low which makes it difficult to find the appropriate
people (Eden & Ackermann, 2013).
 The company may be faced by hefty costs beyond early projections.
 The partner with whom the company gets in an association with may be a poorly matched
partner.

5STRATEGIC MANAGEMENT
Hence, the company Barracuda needs to ensure that it makes a contingency plan for the
above given threats in order to ensure that it does not face any problems in the long run.

6STRATEGIC MANAGEMENT
References
Agarwal, Y. (2003). Strategic Management Competitiveness and Globalization. Finance
India, 17(1), 321.
Corwin, J. (1997). Strategic Management: Competitiveness and Globalization. Baylor Business
Review, 15(2), 6.
Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management.
Sage.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases:
competitiveness and globalization. Cengage Learning.
Robson, W. (2015). Strategic management and information systems. Pearson Higher Ed.