Acquisition strategy to access innovation: the EMC experience in learning lessons

Abstract

ABSTRACT Large multinational IT companies are always trying to produce competitive innovation at a faster pace. Even giant IT corporations, however, are unable to produce sustainable technological innovation alone. Literature offers many alternatives to obtain external technologies, but there are few studies about acquisition strategy to obtain technology innovation. A case study was carried out in a multinational IT company, EMC, which has applied mainly the acquisition strategy to develop innovations and increase its competitive position. The company has acquired many technology-based IT companies in the U.S. and abroad, and this strategy showed effectiveness in value creation, leading them to increase their income, value and market capitalisation during this period. An important finding here is that, by combining acquisitions with increasing investments in R&D, EMC was able to leverage innovations and strengthen its competitiveness and global market presence. The EMC experience has also allowed proposing a graphical tool, showing which are the key management processes that might be considered to get successful in using the acquisition strategy to create values for the business through innovation. Associated with this tool, this study also presents a step-by-step procedure to guide practitioners on how to manage the strategy of acquisition to access innovation.