Professor of Strategy
Drawing on resource-based theory, the authors examine the extent to which firms redeploy three key marketing resources (brands, sales forces, and general marketing expertise) following horizontal acquisitions. Results from a survey of 253 acquisitions show that highly immobile resources are more likely than less immobile resources to be redeployed. Furthermore, resources tend to be redeployed from the acquirer to the target more often that in the reverse direction. Finally, the effects of redeployment on subsequent product costs, product quality, product line breadth, geographic market coverage, market share, and profitability are examined. Cost-based synergies were minimally effected, but revenue-based synergies and overall firm performance were significantly influenced.