Role of Corporate Board

The Ripple Effect of High Profile Acquisitions

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The Ripple Effect of High Profile Acquisitions

As an investor, perhaps you are a shareholder of APPLE stock. When you review news clips or IR reports, you might wonder what is behind the acquisition of the headphone company BEATS. You have invested in APPLE because they have been a major innovator and industry leader, so you wonder if this acquisition will add or detract from APPLE’s position as leading innovators.

As an APPLE customer, you wonder if your iPhone or iPad will now benefit from improved audio quality, or will you yet again be forced to buy a completely new product to get upgraded technology? You also can’t help but wonder why APPLE needed to do such an expensive acquisition to improve sound quality? Won’t this acquisition just raise the prices on APPLE purchases?

Perhaps you are a “techie” and get a kick out of analyzing product engineering. You quickly figured out that the BEATS technology isn’t all that special. You assume that APPLE has grown to prominence because its executives understand marketing. You wonder if the acquisition of celebrity-driven BEATS is more about marketing. If that is all the acquisition is about, wow…that is expensive marketing.

Maybe you oversee a sizable portfolio or are an asset manager within a wealth management firm. You saw how FACEBOOK recently made some acquisitions to slow competition, control emerging technology and buy time. Maybe that is what is going on at APPLE. After all, Steve Jobs is no longer at the helm. Is APPLE using its resources to buy time? Maybe APPLE’s strategic direction isn’t all that clear right now.

As a President of a midsized company, you watch the moves of major corporations like APPLE. You wonder if maybe APPLE’s research department has surfaced a trend that your company is too small to see. Perhaps there is a hot target market that APPLE can penetrate more aggressively. If your company’s products/services are tied to what APPLE does, will this be something important to explore or a distraction?

What do you hope that the directors on APPLE’s board are asking?

Directors of industry leading corporations have greater impact on all of our lives than most people realize.

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