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Title: International acquisition strategy of emerging economies : a study on Chinese hotel companies
Authors: Zhang, Fan
Degree: Ph.D.
Issue Date: 2020
Abstract: In recent decades, internationalisation by companies based in emerging economies (EEs) has grown massively and has become an important engine for global economic growth (Deng & Yang, 2015; Khan, Rao-Nicholson, Akhtar, & He, 2017). Chinese companies have played an active role within the broad internationalization trend as they look for opportunities to expand abroad (Deng, 2012). A large number of Chinese hotel companies have made numerous international acquisitions in host countries such as the United States, France, Spain and Australia and completed several high-profile deals, such as Jin Jiang International Hotels Company's acquisition of Interstate Hotels and Resorts in 2009 and Fosun Tourism Group's acquisition of Club Méditerranée Resorts in 2015 (Bloomberg, 2017). Chinese hotel companies' international acquisition activity is a fruitful area for acquisition research even though empirical evidence is surprisingly sparse. The underlying driving forces, objectives, performance and the acquisition process, particularly the target selection and integration process, have rarely been studied. This study aims to examine the international acquisition process of companies based in EEs, using Chinese hotel companies as the research context. Because this is an exploratory study, a qualitative approach was adopted. Twenty senior corporate executives with an average of 16 years of working experience were interviewed. Based on the results of the interviews, this study proposes a conceptual framework with three phases: (1) the pre-acquisition phase, which identifies the overseas and domestic environments faced by Chinese hotel companies and their acquisition objectives; (2) the actual acquisition phase, which encompasses target selection and integration and (3) the post-acquisition phase, which assesses the performance of the acquisition. In the pre-acquisition phase, several outstanding antecedents and objectives that are not found in the literature were identified, such as outbound tourists and consumption upgrade trends. This study finds, in the actual acquisition phase, that these unique antecedents and objectives caused distinctive target selection and integration approaches, such as the two "active" and "occasional" target selection approaches. In the post-acquisition phase, the performance is evaluated across various dimensions such as assets, brands, human resources, organisation structures and culture. The challenge of performance comes from institutional constraints, talent shortages and cultural conflicts caused by brand repositioning. The complete international acquisition process of the Chinese hotel companies reveals an interesting "small fish eats big fish" pattern. The findings of this study suggest that this process is not only influenced by acquisition types but also by EE conditions and hotel industry features. Moreover, this study reveals that various strategies for international acquisition are used by different types of Chinese hotel companies. This study provides both theoretical and empirical contributions. From a theoretical perspective, this study expands the knowledge on internationalization and acquisition by proposing a more comprehensive conceptual framework for the international acquisition process and by linking this process with EE conditions, hotel industry features and acquisition types. From an empirical viewpoint, the findings provide valuable insights for various stakeholders, such as acquiring companies, particularly those of EEs, and acquired companies, such that they might better understand the issues and challenges throughout the acquisition process and thus adopt appropriate strategies.
Subjects: Consolidation and merger of corporations
Hotels -- China
Hong Kong Polytechnic University -- Dissertations
Pages: xii, 218 pages : color illustrations
Appears in Collections:Thesis

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