The Pac-Man strategy is a business tactic where a company avoids a hostile takeover by buying the attacking business, named after the arcade game. This strategy can be used as a revenge tactic, but it can be costly and bad for shareholders. It has been used historically by several large companies, including Volkswagen Group against Porsche.
Pac-Man strategy, also known as Pac-Man defense, is a business strategy in which a hostile takeover is avoided by buying the attacking business. This term, coined by Bruce Wasserstein, is a reference to the way the Pac-Man arcade game is played. While not always successful, the Pac-Man strategy has been used by many companies to avoid detection. Sometimes, this strategy can be used as a revenge tactic.
To understand the Pac-Man strategy, the reference to the Pac-Man game must first be understood. When playing Pac-Man, the player is chased by different ghosts who have the ability to kill the player. This changes when the player eats a power pellet. After eating a mote of power, the player is then able to turn around and eat the ghosts that were once attacking.
A similar strategy can be used in the real world across businesses. When an attacking firm wants to acquire a company, the firm can buy large amounts of stock in that company until it acquires a controlling stake. This doesn’t necessarily happen quickly, but when the attacked company notices this, it may decide to take action against the attacker to stop the ongoing attack and regain control not only of the original company, but also of the attacker.
One problem with this strategy is that it can be very costly and in some circumstances it can be bad for shareholders. When a company implements the Pac-Man strategy, it’s often not because it’s in the best interests of the company as a whole, but because a change in leadership could occur if the company were to be acquired. The high-ranking company officials attacked have an interest in maintaining the integrity of the company for job security reasons. Even so, it should be noted that a merger, even if hostilely instigated, is not always bad for businesses.
The Pac-Man strategy has been used historically by several large companies, including the Volkswagen Group against a takeover attempt by Porsche. In its most basic form, this tactic has been used by individual businesses since before the term was even invented. The reason it is so popular and successful is that not only does the original purchaser’s purchase prevent a hostile takeover, but it usually also strengthens the existing company. On a visceral level, it also serves as a way to exact revenge on an attacking company, as owning such a company can sometimes allow you to get rid of the attackers entirely.
Protect your devices with Threat Protection by NordVPN
