Southwest Airlines Acquisitions Essay

MGT 450: Strategic Planning for Organizations
Prof: Jeffrey Otterstetter
2 April 2012

In economic climate that has been dubbed the “Great Recession”, businesses are looking for various ways to diversify and thrive. The acquiring of other small businesses with capabilities and clientele that were previously untapped seems to be a conduit organizations are utilizing. Two organizations in particular are Dell Computers and Southwest Airlines. Within this paper I will examine two companies in different industries that are using acquisitions to strengthen their market positions. Next, I will explain how acquiring certain businesses enhance an organizations resource strengths and competitive capabilities.
Dell Computers
Dell’s latest purchase of SonicWall comes in a series of acquisitions in an attempt to boost profit margins by focusing on being a one-stop-shop for business customers, increasing exposure in enterprise solutions offerings and making its presence felt in mobile security and cloud solutions segment. Dells profits and market position has slipped since 2006, where they held the number one slot in revenues. They are currently occupying a very weak third position, but this is not the primary reason Dell has decided to pursue vertical integration. It is all a part of their new strategy which incorporates attacking a rival’s weakness (Gamble, 2011). Hewlett Packard has completely dropped out of the SMB/SME leaving the market wide open for Dell to pursue (Little, 2009). Sonicwall’s acquisition helps bolster Dells new focus. The company has a strong reputation and an even stronger product.   Their Unified Threat Management technology and its firewall capabilities offer security solutions to data centers and large enterprises alike. These are capabilities Dell did not have before and perceive to be beneficial for their continued partial integration. Dell also gets access to Sonicwall's 15,000 channel partners (DePamphilis, 2011). While some overlap is likely...