The Role of Mergers and Acquisitions in Corporate Expansion: An Empirical Study of Eternal (Formerly Zomato)

Abstract

This study evaluates the effectiveness of Mergers and Acquisitions as a growth strategy, by using the case study of Eternal (formerly Zomato). It is observed that a key method of growth and market share acquisition used by Zomato is that of M&As. Due to the rapid growth of the Indian food-tech and the quick-commerce industries in the past decade, M&A has presented itself as the most suitable strategy for market expansion and consolidation. The purpose of this study was to understand the contribution of Zomato’s M&A-led expansion on growth, diversification, and competitive advantage over Swiggy. As the study shows, the core objectives behind Zomato’s recent M&As is access to new product lines and services, expertise and infrastructure in new industries with the central objective of market share acquisition in the relevant industries. The study used an exploratory case study approach based on secondary data and found that, while the market penetration strategies and Diversification strategy of Zomato, with the acquisition of Uber Eats India and Blinkit respectively, are successful strategies with considerable consolidation of market share, it is seen that the acquisition of Urbanspoon and District are strategies where Zomato has deviated from its core Indian market and core business of delivery and logistics, and has faced substantial pressure. Overall, however, the study suggests that these acquisitions helped Zomato in strengthening its market leadership and profitability, while allowing Zomato to diversify away from its core business vertical․