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Technology-focused Acquisitions

Book Description

Technology-focused acquisitions are an important complement to the firm’s internal product development efforts. There is considerable heterogeneity when comparing individual technology-focused acquisitions – especially with respect to acquisition timing and the deal value.

To resolve some of this heterogeneity the author introduces the novel distinction between performance- and functionality-focused acquisitions. He characterizes this distinction based on a theoretical analysis, a qualitative study, and turns to a sample of acquisitions in the field of artificial intelligence for the quantitative study.

There are two key findings. First, performance-focused acquisitions take place earlier in a target’s life cycle than functionality-focused ones. Second, the deal value is – at a comparable stage in a target’s life cycle – higher for performance-focused acquisitions.

This thesis is relevant for management scholars and managers alike: Scholars learn about the implications of the distinction between performance- and functionality-focused acquisitions on markets for technology. Managers gain insights into how this distinction may guide their strategic decision making.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Acknowledgements
  5. Contents
  6. List of figures
  7. List of tables
  8. List of abbreviations
  9. Zusammenfassung
  10. Abstract
  11. 1 Introduction
    1. 1.1 Motivation—Understanding technology-focused acquisitions as an instance of a market for technology
    2. 1.2 Research objective and design
    3. 1.3 Summary of results
    4. 1.4 Structure of the dissertation
  12. 2 Theoretical foundations—Technology-focused acquisitions and strategic decisions
    1. 2.1 Technology-focused acquisitions
      1. 2.1.1 Definition and characteristics of technology-focused acquisitions
      2. 2.1.2 Process of technology-focused acquisitions
      3. 2.1.3 Key issues in technology-focused acquisitions
    2. 2.2 Strategic decision making in technology-focused acquisitions
      1. 2.2.1 Strategic decision making
      2. 2.2.2 Acquisitions as a decision making process
      3. 2.2.3 Key decisions in technology-focused acquisitions
      4. 2.2.4 Relevance of acquisition timing and deal value decisions
  13. 3 Performance- and functionality-focus in product development and acquisitions
    1. 3.1 Core concepts of product development and the relevance of uncertainty
    2. 3.2 Product performance and functionality in product development
      1. 3.2.1 Definition of product performance- and product functionality-focused innovations
      2. 3.2.2 Challenges in delineating product performance- and product functionality-focused innovations
      3. 3.2.3 Technology-level foundations of product performance- and product functionality-focused innovations
      4. 3.2.4 Relation of product performance- and product functionality-focused innovations to other innovation typologies
    3. 3.3 Product performance and product functionality in technology-focused acquisitions
    4. 3.4 Derivation of hypotheses
      1. 3.4.1 Uncertainty profiles of performance- and functionality-focused acquisitions
      2. 3.4.2 Acquisition timing with respect to performance- and functionality-focused acquisitions
      3. 3.4.3 Deal value with respect to performance- and functionality-focused acquisitions
    5. 3.5 Discussion of theoretical findings and conclusion
  14. 4 Qualitative Study—Acquisitions in the ICT Industry
    1. 4.1 Methodology
      1. 4.1.1 Research design
      2. 4.1.2 Sampling
      3. 4.1.3 Data, data collection, and data analysis
      4. 4.1.4 Methodological rigor in the qualitative study
    2. 4.2 Results
      1. 4.2.1 Performance- and functionality-focused acquisitions in the ICT industry
      2. 4.2.2 Uncertainty and risk of technology-focused acquisitions in ICT
      3. 4.2.3 Acquisition timing in technology-focused acquisitions in ICT
      4. 4.2.4 Acquisition deal value in technology-focused acquisitions in ICT
    3. 4.3 Discussion of qualitative results and conclusion
  15. 5 Quantitative study—Performance and functionality in AI-related acquisitions
    1. 5.1 Methodology
      1. 5.1.1 Empirical setting—Acquisitions in AI
      2. 5.1.2 Sampling of AI-related acquisitions
      3. 5.1.3 Data and data collection
    2. 5.2 Variables
      1. 5.2.1 Dependent variables—Acquisition timing and deal value
      2. 5.2.2 Performance- and functionality-focus of acquisitions as the independent variable
      3. 5.2.3 Control variables related to acquirer, target, and deal
    3. 5.3 Descriptive results
      1. 5.3.1 Characterization of dataset and variables
      2. 5.3.2 Correlations
      3. 5.3.3 Uni- and bi-variate analysis and variable transformations
    4. 5.4 Results of hypothesis tests
      1. 5.4.1 Acquisition timing
      2. 5.4.2 Deal value
    5. 5.5 Discussion of quantitative results and conclusion
  16. 6 Conclusion, contributions, and outlook
    1. 6.1 Contributions to theory
    2. 6.2 Practical implications
    3. 6.3 Outlook
  17. Part Appendix
    1. Appendix
    2. A.1 Keyword-based filtering of acquisitions
    3. A.2 Rating approach for technology-focused acquisitions
    4. A.3 Rating approach for performance- and functionality-focused acquisitions
    5. A.4 Correlation table of transformed variables
    6. A.5 Univariate analysis—histograms
    7. A.6 Bivariate analysis—scatter plots and boxplots
  18. Bibliography