“M&A Versus Alliance” Decisions: Insights from the Third-Party Logistics Industry

Purpose : mergers and acquisitions (M&As) and alliances are potential alternative choices for managers, which involve balancing several dimensions, and that only rarely have been compared as substitutes. The present paper attempts to advance knowledge in the understanding of such firms’ external strategy implementation paths, developing a model for interpreting the drivers of such decisions, based on (1) the level of risk and complexity of the industry, (2) the criticality of the acquired resources and competencies for the competitive advantage of the acquiring firm. The theoretical model is applied to the third-party logistics industry through a qualitative study on four cases : DHL Supply Chain & Global Forwarding, DB Schenker, CH Robinson, XPO Logistics. The third-party logistics industry has been subject to significant changes in the last few years which have increased the number of M&As and strategic alliances, so it represents an ideal setting for studying such issues. Design/Methodology/Approach · A multiple case studies methodology has been developed. Findings: · The results show that, in the third-party logistics industry, the two studied dimensions are important in firms’ choice between M&As and alliances, underlining the presence of homogeneous growth paths among logistics services providers. Originality: · From a theoretical standpoint, our paper extends the strategic management literature developing a conceptual model on the drivers of the choice between M&As and alliances. Extant literature is mainly focused on the single growth strategy paths, considering alliances and M&As as alternative choices for firms, while the drivers that push companies to adopt one strategy vs. the other has received much less attention and the debate is still ongoing. Moreover, the paper develops logistics management literature by exploring the strategic motivations of mergers and acquisitions and alliances employed by third-party logistics companies. Research Limitations/Implications · This contribution presents some valuable research implications, useful for researchers and academics, but also professionals and policy makers may benefit from this knowledge. From a managerial point of view, the paper contributes to outline the relevance that certain resources and capabilities present for the competitiveness of 3PLs companies. In particular, the importance of offering value-added services with a complete range of logistics services. The paper presents the typical limitations inherent to the case-study methodology (Yin 1994), in relation to the replicability of results. Further research will therefore have to extend the number of analysed cases or to verify the applicability of the model to other industries.