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We present an empirical investigation into how customers and competitors respond to merger and acquisition (M&A) activity, using data obtained from business-to-business customers of logistics industry acquisitions. We draw on the M&A and marketing literatures to develop a set of hypotheses about how customer loyalty may be affected by a supplier's involvement in an acquisition, including the influence of competitors reactions. Our data confirm that customers purchase behaviours can be affected by M&A activity, both positively and negatively, and we find support for a causal chain whereby post-acquisition integration actions cause changes in key customer relationship variables, which in turn drive changes in customer loyalty. Our results also provide empirical evidence of the significant role that competitors responses can play in reducing customer loyalty following an acquisition. We identify a number of factors that appear to influence the magnitude of competitors reactions, namely the scale and scope of the acquisition, the form of post-acquisition integration pursued and the ‘stickiness’ of existing customers. The implications of our findings for future research, as well as for executives engaged in M&A activity, are discussed.

There is increasing recognition that a marketing, customer-based perspective in merger and acquisition (M&A) processes is needed. However, there is still limited information about how customers experience an acquisition and whether merging firms perceive their customers as assets to trade or as stakeholders to engage. In this chapter, the authors aim to contribute to this knowledge gap by developing a research agenda that incorporates a customer-based perspective in the investigation of M&A. The authors achieve this aim by reviewing 40 articles published in economic, marketing and management journals that examine customer and marketing issues in M&As. By engaging with existing studies and their hidden assumptions and drawing inspiration from current trends in the analysis of consumer behavior, the authors suggest four research avenues to inform future studies and to increase our understanding of M&As from the customer perspective.

In acquisitions of technology-based firms the focus is typically on the technology and the target firm's engineers and scientists. But a firm is a social entity with a range of important internal and external relationships that are essential to the exploitation of existing capabilities, and the development of new ones. These relationships need to be maintained, subsequent to acquisition, to preserve the target firm's ability to innovate and compete. I argue for the importance of the target firm's relationships with its customers, and show that the degree to which the acquisition creates or destroys value for the target firm's customers is a significant predictor of acquisition success.

Research on acquisition performance has not considered the customer perspective for a long time. Based on associative network theory, we propose two spillover effects – forward and reverse – to reflect the effect of acquirer and target reputation on customer responses toward a horizontal acquisition. The reputation of both the acquirer and target can transfer to acquisition and affect customer attitudes toward the post-merged corporation and target customer retentions. However, the influence of the acquirer reputation (forward spillover effect) is stronger than that of the target reputation (reverse spillover effect). Because of asymmetric spillover effects from the acquirer and target, we suggest that the performance effects of A acquiring B may not be the same as that of B acquiring A, given that A and B are highly related firms. The level of post-acquisition brand integration moderates the asymmetric spillover effect on acquisition performance. A higher level of post-acquisition brand integration indicates a stronger asymmetric spillover effect on acquisition performance.

This chapter presents a review of the state of the art on the topic of knowledge transfer following post-merger integration (PMI) in international mergers and acquisitions (M&A) and identifies points of agreement and disagreement, recognizes underexplored areas and provides suggestions on how they could be explored in future studies. The chapter points to the limited amount of literature that describes knowledge transfer following international acquisitions, while highlighting it as an emerging field of research. The knowledge transfer literature mainly refers to innovation and innovation capabilities, while areas such as marketing and customer knowledge are vitally absent in the literature. In any international acquisition, such knowledge transfer would be of fundamental importance, given the acquisition motive to reach new markets or customers. Two case studies on the transfer of knowledge about customers following international acquisitions are provided. The case illustrations point to a focus on knowledge transfer on strategic levels in the post-merger integration following international acquisitions, while the operational sales forces’ transfer of knowledge is largely disregarded in practice. Since much of the tacit knowledge about customers is handled on that level, it needs to be recognized and developed. The chapter indicates that raising the awareness of the transfer of knowledge about customers following international acquisitions is important from a practitioner’s as well as a research point of view.

The study here responds to the view that the crucial problem in strategic management (research) is firm heterogeneity – why firms adopt different strategies and structures, why heterogeneity persists, and why competitors perform differently. The present study applies complexity theory tenets and a “neo-configurational perspective” of Misangyi et al. (2016) in proposing complex antecedent conditions affecting complex outcome conditions. Rather than examining variable directional relationships using null hypotheses statistical tests, the study examines case-based conditions using somewhat precise outcome tests (SPOT). The complex outcome conditions include firms with high financial performances in declining markets and firms with low financial performances in growing markets – the study focuses on seemingly paradoxical outcomes. The study here examines firm strategies and outcomes for separate samples of cross-sectional data of manufacturing firms with headquarters in one of two nations: Finland (n = 820) and Hungary (n = 300). The study includes examining the predictive validities of the models. The study contributes conceptual advances of complex firm orientation configurations and complex firm performance capabilities configurations as mediating conditions between firmographics, firm resources, and the two final complex outcome conditions (high performance in declining markets and low performance in growing markets). The study contributes by showing how fuzzy-logic computing with words (Zadeh, 1966) advances strategic management research toward achieving requisite variety to overcome the theory-analytic mismatch pervasive currently in the discipline (Fiss, 2007, 2011) – thus, this study is a useful step toward solving the crucial problem of how to explain firm heterogeneity.

From the supplier firm's perspective, a referral is a recommendation from A (the referrer) to B (the potential customer) that B should, or should not, purchase from C (the supplier firm). Thus, as referrals are for a specific supplier firm, they should be viewed as part of the supplier firm's marketing and sales activities. We recognize three types of referrals – customer-to-potential customer referrals, horizontal referrals, and supplier-initiated referrals – that have critical roles in a potential customer's purchase decision. We develop the concept of referral equity to capture the net effect of all referrals for a supplier firm in the market. We argue that supplier firms should view referral equity as a resource that has financial value to the firm as it affects the firm's cash flows and profits. We offer strategies firms can use to manage referrals and build their referral equity and suggest a research agenda.