VMS & HMS/STRATEGIC ALLIANCES MERGERS,AQUISITIONS JOINT VENTURES

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  • 1. VMS & HMS/STRATEGIC ALLIANCES MERGERS,AQUISITIONS JOINT VENTURES Renjith J Cyriac Roll No.26 Ex-Pgdm 2013-14 25TH January 2014
  • 2. Contents.. • Introduction • VMS (Vertical Marketing System) • HMS (Horizontal Marketing System) • Mergers • Acquisitions • Strategic Alliances • Joint Ventures
  • 3. Introduction.. • Firms are increasingly paying greater attention to how they manage their marketing channels, so that products and services are delivered at the right time, right place and the right price. • The new forms of marketing channels have evolved based on robust partnerships, with long-term commitment to each other and the customer.
  • 4. VMS (Vertical Marketing System).. • Main members of a distribution channel - producer, wholesaler, and retailer work together as a unified group in order to meet consumer needs.
  • 5. VMS (Vertical Marketing System).. •Combines successive stages of production and distribution under single ownership in order to establish channel leadership.
  • 6. Vertical Marketing System..
  • 7. Corporate VMS • Combines successive stages of production and distribution under single ownership in order to establish channel leadership.
  • 8. Corporate VMS-Sherwin Williams Paints
  • 9. Administered VMS • Coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties
  • 10. Dominant Channel Member  Manufacturer • Companies like General Electric, Procter & Gamble, and kraft can command unusual cooperation from resellers regarding displays, shelf space, promotions, and price policies.
  • 11. Dominant Channel Member  Retailer • Large retailers such as Wal-Mart, Home Depot, and Barnes & Noble can exert strong influence on the manufacturers that supply the products they sell.
  • 12. Contractual VMS.. • Independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone.
  • 13. VMS  Contractual
  • 14. Wholesaler Sponsored Voluntary Chains • Wholesalers organize voluntary chains of independent retailers to help them compete with large chain organizations
  • 15. Retail Cooperatives • Retailers join together to organize a new wholesaling business
  • 16. Franchise Organizations • A channel member called a Franchisor might link several successive stages in the productiondistribution process.
  • 17. VMS Contractual Franchise Organizations
  • 18. Manufacturer Sponsored Retail Franchise
  • 19. Manufacturer Sponsored Wholesale Franchise • Coca-Cola licenses bottlers (wholesalers) in various markets who buy Coca-Cola syrup concentrate and then bottle and sell the finished product to retailers in local markets.
  • 20. Service Firm Sponsored Retail Franchise • A system of service product delivery in which an organisation producing a service (eg. car rental, restaurants, financial services, etc.) sets up a number of independently-owned franchised outlets in locations convenient to its customers.
  • 21. VMS (Vertical Marketing System).. • Advantages : • Greater control over system • Elimination of duplication • Elimination of conflict
  • 22. VMS (Vertical Marketing System).. • Disadvantages : • Employees at the bottom of a vertical structure may feel less valued than those higher up in the chain. • Some employees may not relish the accompanying culture of politics, which places heavy emphasis on pleasing the boss. • Take a great deal of time for top management decisions to filter down through multiple layers, reducing the organization's ability to react quickly to a rapidly changing business climate. • Because of the centralized control of power, weak leadership at the top can hamper the effectiveness of the entire organization.
  • 23. HMS (Horizontal Marketing System).. • Horizontal Marketing System is a set up where 2 or more unrelated companies put together resources or programs to exploit an emerging market opportunity
  • 24. Mergers.. • A transaction where two firms agree to integrate their operations on a relatively co-equal basis because they have resources and capabilities that together may create a stronger competitive advantage.
  • 25. Daimler Chrysler..
  • 26. Glaxo Smithkline..
  • 27. AOL-Time Warner..
  • 28. Acquisitions.. • A transaction where one firms buys another firm with the intent of more effectively using a core competence by making the acquired firm a subsidiary within its portfolio of business
  • 29. Tata Steel.. • In October 2006, Tata Steels acquired Corus with an outstanding price of $12.98 billion.
  • 30. Bharti Airtel.. • In February, 2010, Bharti Airtel added 180 million new customers in its list by acquiring an African Mobile Network provider called Zain Africa. This acquisition took place against an amount of $10.7 billion.
  • 31. Google Motorola • On August 15, Google announced an agreement to acquire Motorola Mobility, based in Libertyville, Illinois, for $40 per share. So urce -http: //www. g o o g le . co m/pre ss/mo to ro la/
  • 32. Tata Motors..
  • 33. ONGC.. • ONGC acquisition of Russia based Imperial Energy for $2.8 billion. This marked the turn around of India’s hunt for natural reserves to compete with China.
  • 34. Strategic Alliances .. • An agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations
  • 35. Apple-Starbucks
  • 36. Jet-Etihad ..
  • 37. Nokia Windows Mobiles • On 11 February 2011,a new strategic alliance with Microsoft announced (Till August 2013) • Replacement of Symbian and the MeeGo project with Microsoft's Windows Phone operating system
  • 38. Joint Ventures.. • Business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. • They exercise control over the enterprise and consequently share revenues, expenses and assets.
  • 39. Sony Ericsson..
  • 40. Nokia Siemens Networks..
  • 41. TATA SIA.. • Tata Sons, Singapore Airlines joint venture orders Airbus A320s • TATA SIA Airlines will start flying in the full service segment in the second half of 2014
  • 42. Difference..
  • 43. HMS (Horizontal Marketing System).. • Advantages : • Employees may attain greater satisfaction due to greater freedom and autonomy. • Keeps the organization ahead of the competition • Streamlined communications and reporting processes making the organization more nimble and adaptable to change.
  • 44. HMS (Horizontal Marketing System).. • Disadvantages : • The decentralized structure could lead to a "loose ship”. • A resulting lack of control can lead to fingerpointing when things go awry, which can hinder productivity • Organizations attempting to convert from a vertical to a horizontal structure can face challenges, as management needs to adjust to a less authoritarian and a more peer-like relationship with subordinates.
  • 45. “The greatest change in corporate culture and the way business is being conducted , m be the ay accelerating growth of relationships based not on ownership, but on partnership.” -P eter FDrucker “S uccessful business strategy is about actively shaping the gam you play, not just e playing the gam you find.” e -Adam B randenburger & B arry Nalebuff