Merger as a growth strategy of business networks: a case study of a drugstore network

Abstract

This article aims to analyze the motivations, the process and the results of a merger strategy established by three business networks. The research consisted in an exploratory single case study. It was analyzed a business network composed by drugstores, formed from the merger of three business networks in the state of Rio Grande do Sul. Data collection occurred through six in-depth interviews conducted with actors directly involved. The main motivation for the adoption of this strategy was the increased competition in the sector and the need to expand economies of scale in negotiating with suppliers. The results also reveal that the networks involved did not have the exact notion of the benefits that could be achieved, which are higher than the initial motivation to get increased market power. It was also found that there was no defined strategy for the formation of the new business network. The merger was consolidated by actions of approach among the networks. The research contributes to the understanding of mergers among networks. From a theoretical point of view, the study describes the merger process; the managerial contribution consists in the presentation of steps for the implementation of new mergers.