The firm was established by Steve Jobs in the year 1975 with the sole aim of developing and selling personal computers. It was fully incorporated in 1977 and renamed Apple Inc. so as to show its focus on the manufacture of major electronics. It is the second leading firm in the world of information technology after the giant Samsung. Currently, Apple has managed to acquire a total of 62 companies and has proceeded to purchase stakes in the other two companies. One of the philosophies of the company is to acquire as many small firms as possible and to integrate them into its big goal and projects.
The first acquisition was made in the year 1988 with the purchase of Network Innovations and the highest number of the acquisition was attained in the year 2013 in which it acquired a total of 13 firms. The most expensive acquisition by Apple was done this year in the month of August when t acquired Beats Electronics at a cost of US$3 billion. 46 out of the 62 acquisitions and mergers by Apple has been on the firms in the United States.
Apple has adopted a strategy that seeks to improve its financial position every year and this is the fact that has motivated the company to acquire many companies as possible so as to realize this strategy. Financial performance improvement can be attained through acquisitions and mergers due to the fact that mergers lead to economy of scale. By combining several companies, Apple has ensured that it has reduced its operating costs by removal of duplicate departments leading to an increase at the end of the year profits.
The company has gained economies of the scope which refers to the increased efficiencies primarily associated with demand-side changes, such as increasing or decreasing the scope of marketing and distribution, of different types of products. It has further increased its market share especially with its latest acquisition of Beats Electronics that has seen it ranked second after Samsung in the field of electronics and has greatly reduced its would-be competitors by merging with them.
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