Research On The Target Enterprise Selection Of M&A Based On The Integration Of Value Chain

This article has set up the 3S model which states that the essential factors in selection of M&A target enterprise is the Strategy of the merging corporation, the industry Structure and the Situation of the target corporation. The three key factors are at the point of value chain for the research of M&A activity. The aim of M&A is to acquire the competitive advantage, which would be realized through the optimization of the value chain. So it should be focused on the way of improvement of value chain in the research of M&A. The strategy would be direct the enhancing of the value chain of the enterprise itself. It helps to find the value activities that need ameliorating. The analyzing of industry structure is to know the industry value chain that is for the updating in the industry. While the study on the target corporation alters from the finance index to the matters referring to the post integration. The assessment of M&A is based on the three key factors. And three inspecting elements are derived. They are inspecting on strategy deepening, inspecting on industry updating and inspecting on cost-value. The three elements structure the theory frame of value chain integration. The frame indicates the inspecting method of each element. This article is to find the criterion of M&A target selection. Then form a method to choose the right target through the scenario. The research on M&A focus not only on the target enterprise itself but also the strategy and the industry with plenty of consideration about the changing of value chain. Changes include the value chain optimization and updating in industry value chain. It is the origination of long-term competitive advantage, which is also the ultimate aim of M&A.