1) The document discusses corporate and vertical integration strategies presented by various groups. It covers topics like definitions of vertical integration, explanations for when it creates value, rare vertical integration strategies, and organizing to implement it.
2) It also discusses merger and acquisition strategies, including definitions of mergers vs acquisitions, empirical evidence on whether they create value, related vs unrelated M&A cases, and rules for both bidding and target firm managers.
3) Finally, it examines the quest for parenting advantage in M&A, assessing fit between parent and businesses, making changes to improve fit, and creating corporate advantage through leveraging common resources, organization, and control systems.
This is one complete analysis of Financial Statements of Tata Motors. It includes Ratio analysis, Trend analysis, common size statement as well as comparative income statement and cash flow statement.
Economic Value Added (EVA) is a metric developed by Stern Stewart & Co. in 1982 to evaluate business strategies and maximize long-term shareholder wealth. EVA is defined as net operating profit after taxes (NOPAT) minus the cost of capital. To calculate EVA, a company determines its NOPAT, weighted average cost of capital (WACC), and capital employed to see if it is generating returns above its cost of capital and creating economic value. EVA aims to align managerial decisions with shareholder interests.
Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location.
Wealth Maximization is superior then the profit maximizationVTU,Belgaum
Wealth maximization is superior to profit maximization for several reasons. Wealth maximization considers long-term sustainability rather than short-term profits. It accounts for the time value of money by discounting future cash flows. Wealth maximization also factors in risk and uncertainty through the discount rate. The goal of wealth maximization is to improve shareholder value, while considering the total value generated relative to costs for the business. It provides a more efficient allocation of resources while also ensuring benefits to society.
The document summarizes the merger of Idea and Vodafone India. Vodafone India and Idea Cellular were the second and third largest mobile network operators in India, respectively. In 2017, they announced a merger to create the largest telecom operator in India, with over 400 million subscribers. Key terms of the merger included equal representation of both companies on the board and in management, with Aditya Birla Group and Vodafone Group becoming joint promoters of the new combined entity called Vodafone Idea Limited. The merger aimed to leverage the companies' networks, assets, and market positions to achieve leadership across India.
This document provides an overview of venture capital. It defines venture capital as equity support that funds new business concepts with higher risk but also higher growth potential. The document outlines the typical stages of venture capital funding from seed money to bridge financing. It also describes the roles within a venture capital firm such as general partners and limited partners. Key features of venture capital investments are discussed like the long time horizon, lack of liquidity, high risk, and equity participation. Finally, the advantages of venture capital for the economy, investors, and entrepreneurs are summarized.
The document discusses dividend policy and its various aspects. It defines dividend and explains the relevance and irrelevance concepts of dividend. It describes different approaches to dividend policy including the residual approach, MM model, Walter's approach and Gordon's approach. It also discusses determinants of dividend policy, types of dividend policies and forms of dividend including cash, stock and property dividends. The legal aspects of dividend payment are also summarized.
This is one complete analysis of Financial Statements of Tata Motors. It includes Ratio analysis, Trend analysis, common size statement as well as comparative income statement and cash flow statement.
Economic Value Added (EVA) is a metric developed by Stern Stewart & Co. in 1982 to evaluate business strategies and maximize long-term shareholder wealth. EVA is defined as net operating profit after taxes (NOPAT) minus the cost of capital. To calculate EVA, a company determines its NOPAT, weighted average cost of capital (WACC), and capital employed to see if it is generating returns above its cost of capital and creating economic value. EVA aims to align managerial decisions with shareholder interests.
Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or new location.
Wealth Maximization is superior then the profit maximizationVTU,Belgaum
Wealth maximization is superior to profit maximization for several reasons. Wealth maximization considers long-term sustainability rather than short-term profits. It accounts for the time value of money by discounting future cash flows. Wealth maximization also factors in risk and uncertainty through the discount rate. The goal of wealth maximization is to improve shareholder value, while considering the total value generated relative to costs for the business. It provides a more efficient allocation of resources while also ensuring benefits to society.
The document summarizes the merger of Idea and Vodafone India. Vodafone India and Idea Cellular were the second and third largest mobile network operators in India, respectively. In 2017, they announced a merger to create the largest telecom operator in India, with over 400 million subscribers. Key terms of the merger included equal representation of both companies on the board and in management, with Aditya Birla Group and Vodafone Group becoming joint promoters of the new combined entity called Vodafone Idea Limited. The merger aimed to leverage the companies' networks, assets, and market positions to achieve leadership across India.
This document provides an overview of venture capital. It defines venture capital as equity support that funds new business concepts with higher risk but also higher growth potential. The document outlines the typical stages of venture capital funding from seed money to bridge financing. It also describes the roles within a venture capital firm such as general partners and limited partners. Key features of venture capital investments are discussed like the long time horizon, lack of liquidity, high risk, and equity participation. Finally, the advantages of venture capital for the economy, investors, and entrepreneurs are summarized.
The document discusses dividend policy and its various aspects. It defines dividend and explains the relevance and irrelevance concepts of dividend. It describes different approaches to dividend policy including the residual approach, MM model, Walter's approach and Gordon's approach. It also discusses determinants of dividend policy, types of dividend policies and forms of dividend including cash, stock and property dividends. The legal aspects of dividend payment are also summarized.
Venture capital power point presentationKarthik S Raj
Venture capital involves investing in startup companies and small businesses with growth potential. It provides funding to new companies and helps them grow. Venture capital is high-risk but can provide high returns. It is typically invested in technology, biotech, or other innovative companies. Venture capital funds pool money from investors and then invest in ventures on their behalf. They provide capital as well as management assistance to the companies they invest in.
Preference shares are shares that have preferential rights to dividends and repayment of capital compared to common shares. There are several types of preference shares: cumulative vs non-cumulative, participating vs non-participating, convertible vs non-convertible, and redeemable vs non-redeemable. Preference shares provide benefits like helping companies raise long-term capital and guaranteeing fixed returns, but also have drawbacks like lack of trading and lower returns.
The Concept
A stable strategy arises out of a basic perception by the management that the firm should concentrate on using its present resources for developing its competitive strength in particular market areas.
In simple words, stability strategy refers to the company’s policy of continuing the same business and with the same objectives
A firm pursues stability strategy when
1. It continues to serve the public in the same product or service, market, and function sectors as defined in its business definition.
2. Its main strategic decisions focus on incremental improvement of functional performance.
2. Corporate Restructuring is the process of redesigning one or more aspects of a company.
3. The process of reorganizing a company may be implemented due to a number of different factors, such as positioning the company to be more competitive, surviving a currently adverse economic climate, or acting on the self confidence of the corporation to move in an entirely new direction.
The document analyzes Porter's Five Forces model in the context of the Indian banking industry. It discusses the competitive nature of the industry, with many public and private sector banks vying for customers. While it is difficult for new banks to enter due to customer trust in established brands, online banking has reduced switching costs between banks. The major suppliers of capital to banks are customers through deposits and loans from other institutions. While insurance and mutual funds can substitute some banking services, core banking functions have no real substitutes. Overall, the Indian banking sector has grown significantly in recent decades and remains an important part of the economy.
The document discusses capital structure, which refers to the mix of debt and equity used by a company to finance its long-term operations. It examines several factors that influence a company's capital structure choices as well as different theories about optimal capital structure. The Net Income Theory proposes that firms can maximize value and minimize cost of capital by using as much debt as possible. The Net Operating Income Theory argues capital structure is irrelevant to firm value and cost of capital. The Traditional Theory suggests an optimal debt-equity mix exists. Finally, the Modigliani-Miller Theory states that under certain assumptions, capital structure does not impact firm value or cost of capital, though when taxes are considered, more debt can increase value.
The document defines and explains the concept of a leveraged buyout (LBO). It states that an LBO is the takeover of a company using a large amount of borrowed money, usually 70% or more of the total purchase price, with the remainder being equity. It then provides more details on how LBOs work, including that a financial buyer like an LBO fund takes over a public or private firm, finances it partly through its own equity and partly through large amounts of debt, holds the firm for 2-10 years, and then sells it through an IPO, trade sale, or to another LBO fund. Examples of LBOs provided include Tata Tea acquiring Tetley through an LBO deal
The document provides a corporate governance rating for Reliance Industries Limited (RIL) across several parameters. It finds that RIL's capability is very high for equitable treatment of shareholders, ownership rights of shareholders, transparency and disclosure, composition of the board, management assessment, and value creation for stakeholders. It rates RIL's capability as high for the functioning of the board. The overall corporate governance rating for RIL is very high.
This document discusses the various sources of finance available to businesses. It identifies two main categories of sources - external and internal. External sources include issuing shares, debentures, accepting public deposits, and taking loans from financial institutions and commercial banks. Internal sources include retained profits that are reinvested in the business. Long-term sources are used to finance fixed capital needs, while short-term sources are used to meet working capital requirements. Specific external sources discussed in detail include shares, debentures, public deposits, loans from financial institutions and commercial banks, and trade credit.
A bonus issue is a stock dividend, allotted by the company to reward the existing shareholders without receiving any additional payment from them, it is known as issue of bonus shares
This document discusses leasing and hire purchase. It defines leasing as a contract where the owner of an asset grants another party exclusive use of the asset for an agreed period in exchange for rent payments. Hire purchase allows a party to take possession of a good by paying in installments, with ownership transferring after all payments are made. The document outlines the key features, types, advantages and disadvantages of both leasing and hire purchase agreements.
This document provides an overview of microfinance in India. It defines microfinance and its key features. It discusses the evolution of microfinance in India since the 1970s. It describes the different models of microfinance delivery including self-help groups (SHGs), joint liability groups (JLGs), microfinance institutions (MFIs), and the priority sector lending framework. It summarizes the recommendations of the Malegam Committee on regulating the microfinance sector in India. Finally, it provides some statistics on the growth and current status of microfinance in India.
The document discusses Consumer Products Limited, a public company that produces fast-moving consumer goods like washing powder and soap. It summarizes that the Washing Products Group is the company's most profitable division, led by their star product Dazzle washing powder which accounts for one-third of total profits. However, a new competitor called Spark has launched a 700g pack for the same price as Dazzle and offered coupons for a promotional bucket, resulting in a 15-30% sales loss for Dazzle. The objectives and alternatives discussed aim to regain Dazzle's customers and market share from Spark.
Reliance Industries Limited Company Full PresentationAyush Goel
Topics covered in this PPT
1. Company Overview
2. Organization Structure
3. Policies of the company to motive employees
4. Recruitment, Training and
5. Key parameters of the Financial Statement
6. Business Environment and competitor analysis - PESTEL, SWOT, and Porter's five forces
7. Corporate social responsibility initiatives
8. Marketing Strategy and Target Customer Groups
9. Key IT/technological transformations
10. References
ICICI Prudential Life Insurance is a joint venture between ICICI Bank and Prudential Plc established in 2000. It offers various individual and group insurance plans like term plans, wealth plans, child plans, health plans, retirement plans, ULIPs and group plans. The plans cater to different demographics and socio-economic segments across India with the goal of providing financial protection and saving/investment solutions. The summary highlights the company details and provides an overview of the types of insurance products and plans offered to different customer segments.
The Capital Asset Pricing Model (CAPM) is a model used to determine a theoretically appropriate required rate of return of an asset, to make decisions about adding assets to a well-diversified portfolio. It describes the relationship between risk and expected return and is used to price risky securities and generate expected returns.
TAX PLANNING WITH REFERENCE TO FINANCIAL MANAGEMENTArup Bordoloi
This document discusses tax planning relating to financial management decisions. It covers how capital structure, means of financing, and dividend policy can impact tax liability. Optimal capital structure and use of debt versus equity can lower tax costs. Dividends are taxable but distributing bonuses shares to equity holders does not incur tax liability and increases the shareholder's cost basis. The document provides details on what qualifies as a dividend and how expenses related to dividend income can be deducted.
The document discusses the Insurance Regulatory and Development Authority (IRDA) of India. It provides information on IRDA's mission to promote and regulate the orderly growth of the insurance industry in India. Some key details include: IRDA was established in 1999 by an act of Parliament and is responsible for regulating life and non-life insurance companies. It is headed by a chairman and has other whole-time and part-time members. IRDA's functions include protecting policyholders, granting licenses, monitoring investments and financial health of insurers.
The document discusses key concepts related to working capital management including:
- Gross working capital refers to a firm's total investment in current assets like cash, inventory, and accounts receivable. Net working capital is current assets minus current liabilities.
- Determinants of working capital include the nature of the business, production cycle, inventory and credit policies, and growth plans.
- Operating cycle refers to the time period between a firm paying for raw materials and collecting cash from sales, and considers inventory conversion, collection of receivables, and deferral of payables periods.
This document outlines various theories of corporate mergers and acquisitions, including differential managerial efficiency, inefficient management, synergy, pure diversification, strategic realignment, hubris, Q-ratio, information and signaling, agency problems, market power, managerialism, and tax considerations. It provides details on each theory, such as how differential efficiency posits that a merger can increase efficiency by bringing a less efficient firm up to the level of the more efficient acquirer. Synergy theories note mergers can create value through operating synergies like economies of scale and scope or financial synergies that lower the combined firm's cost of capital.
Newell manufactured drapery hardware and had revenues of $14 million in 1966, but through strategic acquisitions and organic growth expanded its product line and increased revenues to $3 billion by 1997, ranking 22nd on the Fortune 500 for shareholder return. The case highlights how Newell aligned acquired businesses, developed specialized yet transferable resources, coordinated across a wide but focused scope, and established efficient control systems to realize corporate advantages from independent business unit operations.
Strategic management involves analyzing a firm's internal and external environment to make decisions and take actions to create and sustain competitive advantage over the long term. It encompasses the entire organization and its stakeholders. The three major steps are strategy analysis, formulation of decisions, and implementation of actions. Strategic management ensures consistency among a firm's goal hierarchy including its vision, mission, and objectives.
Venture capital power point presentationKarthik S Raj
Venture capital involves investing in startup companies and small businesses with growth potential. It provides funding to new companies and helps them grow. Venture capital is high-risk but can provide high returns. It is typically invested in technology, biotech, or other innovative companies. Venture capital funds pool money from investors and then invest in ventures on their behalf. They provide capital as well as management assistance to the companies they invest in.
Preference shares are shares that have preferential rights to dividends and repayment of capital compared to common shares. There are several types of preference shares: cumulative vs non-cumulative, participating vs non-participating, convertible vs non-convertible, and redeemable vs non-redeemable. Preference shares provide benefits like helping companies raise long-term capital and guaranteeing fixed returns, but also have drawbacks like lack of trading and lower returns.
The Concept
A stable strategy arises out of a basic perception by the management that the firm should concentrate on using its present resources for developing its competitive strength in particular market areas.
In simple words, stability strategy refers to the company’s policy of continuing the same business and with the same objectives
A firm pursues stability strategy when
1. It continues to serve the public in the same product or service, market, and function sectors as defined in its business definition.
2. Its main strategic decisions focus on incremental improvement of functional performance.
2. Corporate Restructuring is the process of redesigning one or more aspects of a company.
3. The process of reorganizing a company may be implemented due to a number of different factors, such as positioning the company to be more competitive, surviving a currently adverse economic climate, or acting on the self confidence of the corporation to move in an entirely new direction.
The document analyzes Porter's Five Forces model in the context of the Indian banking industry. It discusses the competitive nature of the industry, with many public and private sector banks vying for customers. While it is difficult for new banks to enter due to customer trust in established brands, online banking has reduced switching costs between banks. The major suppliers of capital to banks are customers through deposits and loans from other institutions. While insurance and mutual funds can substitute some banking services, core banking functions have no real substitutes. Overall, the Indian banking sector has grown significantly in recent decades and remains an important part of the economy.
The document discusses capital structure, which refers to the mix of debt and equity used by a company to finance its long-term operations. It examines several factors that influence a company's capital structure choices as well as different theories about optimal capital structure. The Net Income Theory proposes that firms can maximize value and minimize cost of capital by using as much debt as possible. The Net Operating Income Theory argues capital structure is irrelevant to firm value and cost of capital. The Traditional Theory suggests an optimal debt-equity mix exists. Finally, the Modigliani-Miller Theory states that under certain assumptions, capital structure does not impact firm value or cost of capital, though when taxes are considered, more debt can increase value.
The document defines and explains the concept of a leveraged buyout (LBO). It states that an LBO is the takeover of a company using a large amount of borrowed money, usually 70% or more of the total purchase price, with the remainder being equity. It then provides more details on how LBOs work, including that a financial buyer like an LBO fund takes over a public or private firm, finances it partly through its own equity and partly through large amounts of debt, holds the firm for 2-10 years, and then sells it through an IPO, trade sale, or to another LBO fund. Examples of LBOs provided include Tata Tea acquiring Tetley through an LBO deal
The document provides a corporate governance rating for Reliance Industries Limited (RIL) across several parameters. It finds that RIL's capability is very high for equitable treatment of shareholders, ownership rights of shareholders, transparency and disclosure, composition of the board, management assessment, and value creation for stakeholders. It rates RIL's capability as high for the functioning of the board. The overall corporate governance rating for RIL is very high.
This document discusses the various sources of finance available to businesses. It identifies two main categories of sources - external and internal. External sources include issuing shares, debentures, accepting public deposits, and taking loans from financial institutions and commercial banks. Internal sources include retained profits that are reinvested in the business. Long-term sources are used to finance fixed capital needs, while short-term sources are used to meet working capital requirements. Specific external sources discussed in detail include shares, debentures, public deposits, loans from financial institutions and commercial banks, and trade credit.
A bonus issue is a stock dividend, allotted by the company to reward the existing shareholders without receiving any additional payment from them, it is known as issue of bonus shares
This document discusses leasing and hire purchase. It defines leasing as a contract where the owner of an asset grants another party exclusive use of the asset for an agreed period in exchange for rent payments. Hire purchase allows a party to take possession of a good by paying in installments, with ownership transferring after all payments are made. The document outlines the key features, types, advantages and disadvantages of both leasing and hire purchase agreements.
This document provides an overview of microfinance in India. It defines microfinance and its key features. It discusses the evolution of microfinance in India since the 1970s. It describes the different models of microfinance delivery including self-help groups (SHGs), joint liability groups (JLGs), microfinance institutions (MFIs), and the priority sector lending framework. It summarizes the recommendations of the Malegam Committee on regulating the microfinance sector in India. Finally, it provides some statistics on the growth and current status of microfinance in India.
The document discusses Consumer Products Limited, a public company that produces fast-moving consumer goods like washing powder and soap. It summarizes that the Washing Products Group is the company's most profitable division, led by their star product Dazzle washing powder which accounts for one-third of total profits. However, a new competitor called Spark has launched a 700g pack for the same price as Dazzle and offered coupons for a promotional bucket, resulting in a 15-30% sales loss for Dazzle. The objectives and alternatives discussed aim to regain Dazzle's customers and market share from Spark.
Reliance Industries Limited Company Full PresentationAyush Goel
Topics covered in this PPT
1. Company Overview
2. Organization Structure
3. Policies of the company to motive employees
4. Recruitment, Training and
5. Key parameters of the Financial Statement
6. Business Environment and competitor analysis - PESTEL, SWOT, and Porter's five forces
7. Corporate social responsibility initiatives
8. Marketing Strategy and Target Customer Groups
9. Key IT/technological transformations
10. References
ICICI Prudential Life Insurance is a joint venture between ICICI Bank and Prudential Plc established in 2000. It offers various individual and group insurance plans like term plans, wealth plans, child plans, health plans, retirement plans, ULIPs and group plans. The plans cater to different demographics and socio-economic segments across India with the goal of providing financial protection and saving/investment solutions. The summary highlights the company details and provides an overview of the types of insurance products and plans offered to different customer segments.
The Capital Asset Pricing Model (CAPM) is a model used to determine a theoretically appropriate required rate of return of an asset, to make decisions about adding assets to a well-diversified portfolio. It describes the relationship between risk and expected return and is used to price risky securities and generate expected returns.
TAX PLANNING WITH REFERENCE TO FINANCIAL MANAGEMENTArup Bordoloi
This document discusses tax planning relating to financial management decisions. It covers how capital structure, means of financing, and dividend policy can impact tax liability. Optimal capital structure and use of debt versus equity can lower tax costs. Dividends are taxable but distributing bonuses shares to equity holders does not incur tax liability and increases the shareholder's cost basis. The document provides details on what qualifies as a dividend and how expenses related to dividend income can be deducted.
The document discusses the Insurance Regulatory and Development Authority (IRDA) of India. It provides information on IRDA's mission to promote and regulate the orderly growth of the insurance industry in India. Some key details include: IRDA was established in 1999 by an act of Parliament and is responsible for regulating life and non-life insurance companies. It is headed by a chairman and has other whole-time and part-time members. IRDA's functions include protecting policyholders, granting licenses, monitoring investments and financial health of insurers.
The document discusses key concepts related to working capital management including:
- Gross working capital refers to a firm's total investment in current assets like cash, inventory, and accounts receivable. Net working capital is current assets minus current liabilities.
- Determinants of working capital include the nature of the business, production cycle, inventory and credit policies, and growth plans.
- Operating cycle refers to the time period between a firm paying for raw materials and collecting cash from sales, and considers inventory conversion, collection of receivables, and deferral of payables periods.
This document outlines various theories of corporate mergers and acquisitions, including differential managerial efficiency, inefficient management, synergy, pure diversification, strategic realignment, hubris, Q-ratio, information and signaling, agency problems, market power, managerialism, and tax considerations. It provides details on each theory, such as how differential efficiency posits that a merger can increase efficiency by bringing a less efficient firm up to the level of the more efficient acquirer. Synergy theories note mergers can create value through operating synergies like economies of scale and scope or financial synergies that lower the combined firm's cost of capital.
Newell manufactured drapery hardware and had revenues of $14 million in 1966, but through strategic acquisitions and organic growth expanded its product line and increased revenues to $3 billion by 1997, ranking 22nd on the Fortune 500 for shareholder return. The case highlights how Newell aligned acquired businesses, developed specialized yet transferable resources, coordinated across a wide but focused scope, and established efficient control systems to realize corporate advantages from independent business unit operations.
Strategic management involves analyzing a firm's internal and external environment to make decisions and take actions to create and sustain competitive advantage over the long term. It encompasses the entire organization and its stakeholders. The three major steps are strategy analysis, formulation of decisions, and implementation of actions. Strategic management ensures consistency among a firm's goal hierarchy including its vision, mission, and objectives.
Saatchi & Saatchi is a global advertising agency founded in London in 1970 with over 140 offices worldwide and 6,500 staff. It was originally headquartered in London but is now based in New York. In 2000, the agency was acquired by the Publicis Groupe. The document then discusses two T-Mobile advertisements, one set in a train station showing people dancing to stay connected, the other handing out parking tickets that contain money instead of fines in various UK cities.
Saatchi & Saatchi is a global advertising agency founded in 1970 in London by brothers Maurice and Charles Saatchi. It has over 140 offices in 76 countries and employs more than 6,500 staff. In 2000, the agency was acquired by Publicis Groupe.
Saatchi & Saatchi is a global advertising agency network founded in London in 1970 with over 140 offices worldwide and 6,500 staff. It was acquired by Publicis Groupe in 2000 and was previously listed on the London Stock Exchange. One document discusses a T-Mobile dance advert filmed in a train station to show how their network keeps people connected, while another analyzes a humorous T-Mobile parking ticket advert filmed in real English locations.
The document discusses Saatchi & Saatchi's approach and work. It provides examples of campaigns created by Saatchi & Saatchi offices in different countries for various clients. The document emphasizes the agency's focus on developing big, world-changing ideas and transforming brands through strong emotional connections rather than just traditional advertising. It also outlines the agency's global network and strategies for understanding audiences and developing integrated marketing solutions.
This document provides a summary of a personality assessment report for an individual named MaryLou Newell. The report identifies Mystique and Trust as MaryLou's primary and secondary "triggers" or personality strengths. Her archetype is described as the Wise Owl, characterized by remaining focused and controlled without drama while building success gradually with strong foundations. The report provides details on how MaryLou can best apply her Mystique and Trust strengths at work, compares her results to those of 130,000 other assessments, and offers next steps for professional development.
Turning Great Strategy Into Great Performanceepgdbm090125
This document discusses how to close the strategy-to-performance gap that many companies face. It provides 7 rules for linking strategic planning and execution, such as keeping strategies simple and concrete, debating assumptions rather than forecasts, and continuously monitoring performance. Following these rules can help determine if issues lie with the strategy, planning, or execution. The payoff is being able to make quick mid-course corrections to achieve strategic goals.
S&OP at Newell Rubbermaid: Moving Beyond the Basicsadownard
The document discusses Newell Rubbermaid's strategy for improving its Sales and Operations Planning (S&OP) process. It outlines workstreams focused on people, process, and technology to drive S&OP compliance and effectiveness. The initial focus is on executing the basics of S&OP well within each business entity before expanding coordination between entities and moving beyond foundational S&OP practices. Key capabilities like forecasting and inventory optimization will be integrated into a standardized global S&OP framework.
Learn about the different marketing strategies on creating a competitive advantage. Access via Prezi: http://prezi.com/b868hy7ryh0u/creating-competitive-advantage/
Case Study: Lessons from Newell Rubbermaid's SAP HANA Proof of ConceptSAPinsider Events
View this session from Reporting & Analytics 2014. Coming to Las Vegas in November! www.reporting2015.com
In this session, Newell Rubbermaid guides you through the key elements that comprised its SAP HANA business case and proof of concept, including an emphasis on process improvement. Learn firsthand how Newell Rubbermaid:
· Identified which business processes were most likely to realize significant improvement as a result of utilizing SAP HANA
· Established a “current state” baseline and demonstrated a “projected state” that could be realized through the use of SAP HANA
· Determined which SAP BI tools to use based on specific reporting scenarios and end user requirements
Carrot or stick case study. Licensing strategy at Tessera. Carles DebartCarles Debart
Tessera develops microtechnologies used in consumer electronics. It licenses its innovations to manufacturers through "carrot licensing" rather than litigating as a "stick". Tessera faces challenges monetizing its new fanless cooling system as potential customers in China are more prone to avoid paying licenses. Porter's five forces analysis shows moderate buyer power and a weak appropriability regime threaten profits. Recommendations include that Tessera may need to change from licensing to integrating manufacturing to control technology and avoid copying that does not generate revenue.
This document provides an overview of corporate strategy concepts. It defines corporate strategy as strategies concerned with the long-term direction of an organization's businesses. It distinguishes between single and multiple business organizations and explains how corporate strategy relates to competitive and functional strategies. The document outlines various corporate strategic directions including organizational growth, stability, and renewal. It also describes different growth strategies such as diversification, integration, concentration, and international expansion.
SM Lecture Six : Corporate Strategy and DiversificationStratMgt Advisor
This document provides an overview of strategic management concepts related to strategic choices and corporate strategy. It discusses various strategic options companies can pursue, including market penetration, product development, market development, and diversification. It defines related and unrelated diversification strategies and explains potential advantages and disadvantages. The document also covers corporate strategy and the development of corporate portfolios, including through international expansion and divestment of unrelated businesses. Key frameworks discussed include the Ansoff matrix and evaluating potential for synergy through diversification.
This document discusses the different levels of strategy employed by Tata Group, including corporate, business, and functional strategies. It provides examples of Tata's growth, acquisition, joint venture, turnaround, divestment, differentiation, value innovation, R&D, operations, and sustainability strategies. Key strategies mentioned include Tata's alliance with NTT DoCoMo, acquisition of Corus and other companies, joint ventures with Starbucks and others, transforming Tata Power Delhi Distribution, and investing over 12,500 crore annually in R&D.
Business policy & Strategic Management for MBAUlhas Wadivkar
The document provides an overview of the syllabus for a course on Business Policy and Strategic Management. It discusses the evolution of business policy as a discipline from the early 20th century to present day. It also covers various definitions and concepts of strategy from a military and business perspective, including the four paradigms of strategic management: ad-hoc policy making, integrated policy formulation, the concept of strategy, and strategic management.
Techniques of Strategic Evaluation & Strategic Manik Kudyar
The document discusses strategic evaluation and control. It defines strategic evaluation as determining the effectiveness of a strategy in achieving objectives and making corrections. Key aspects of strategic evaluation include assessing internal/external factors, measuring performance, and taking corrective actions. Strategic control ensures the strategy and its implementation meet objectives. Techniques for strategic evaluation include gap analysis, SWOT analysis, PEST analysis, and benchmarking. Strategic control types are premise control, implementation control, strategic surveillance, and special alert control.
This document discusses international management strategies for multinational companies (MNCs). It covers generic competitive strategies like low cost leadership and differentiation. It also discusses competitive advantage through distinctive competencies and a company's value chain. Both offensive and defensive strategies are explained as well as related and unrelated diversification approaches. The effects of globalization and national context on convergence and divergence of management strategies are also summarized. Key topics include industry analysis, identifying success factors, and adapting traditional strategic formulation to MNCs.
What is Strategy from the Perspective of Managementkingmiru
This document provides an overview of strategy and strategic management. It defines strategy as management's plan to achieve long-term organizational goals by configuring resources and competencies. The three key strategic questions are where the organization currently stands, where it wants to go, and how it will get there. A strategy consists of competitive moves and approaches used to please customers, compete successfully, and achieve objectives. Crafting and executing the right strategy is the core responsibility of management and the greatest test of their excellence.
This document discusses corporate-level strategy and diversification. It defines corporate-level strategy as specifying actions to manage a group of different businesses across industries. Firms vary in their level of diversification from single or dominant businesses to unrelated diversification across industries. Reasons for diversification include economies of scope, market power, and reducing risk. Related diversification creates value through sharing core competencies or transferring skills between related businesses. Unrelated diversification seeks to treat value through restructuring or an efficient internal capital market. The level of diversification can impact firm performance.
Chapter iii strategic analysis and choice in the multi-business companySuzana Vaidya
This document discusses corporate-level strategy and strategic analysis for multi-business companies. It begins by defining corporate strategy and strategic business units. It then outlines the functions of corporate management, including managing the corporate profile through diversification decisions, managing individual businesses, and managing linkages between businesses. The rest of the document discusses frameworks for analyzing a company's portfolio of businesses, including rationalizing diversification and integration opportunities, and techniques like the BCG matrix, Industry Attractiveness-Business Strength matrix, and others. It also covers limitations of portfolio approaches and behavioral considerations that affect strategic choices.
The document discusses corporate-level strategy and diversification. It provides questions and answers about the differences between business-level and corporate-level strategy. It also discusses the various types of diversification like related, unrelated, and reasons companies pursue diversification strategies like economies of scope, market power, efficient allocation of resources. Diversified companies are often better managed with a multidivisional structure to allow for accurate performance monitoring and resource allocation between divisions.
Mid term (apple inc keeping the ‘i’ in innovation)Christian Tobing
This document is a case study on Apple Inc. and keeping innovation at the core of its business strategy. It discusses Apple's strategic management process, including analyzing external opportunities and threats, formulating strategies, and implementing actions to achieve competitiveness and above-average returns. The case examines how Apple continues innovating through new products and technologies to maintain its competitive advantage.
The organization of the future tact presentation fri. sept. 9. 2011lanre_oyegbola
The document discusses the strategic imperatives and core competencies needed for organizations in the 21st century. It notes that boundaries are dissolving, value is redefined based on quality and speed, and technology is a universal asset. Differentiation now comes through superior service. To succeed, organizations must (1) increase strategic decision-making speed; (2) focus portfolios through various business models; (3) shorten strategic life cycles; (4) create flexible go-to-market approaches; (5) enhance competitive innovation; and (6) embrace cannibalism of existing products. The core lessons are that organizations can no longer rely on standard approaches and must move quickly, focus on service, accept cannibalism, be first
The document discusses various corporate-level strategies in India, including diversification trends from 1950-1990 and refocusing on core businesses from 1991 onwards. It covers directional strategies of growth, stability, and retrenchment. Growth can include internal expansion or external diversification. Stability pursues slow, controlled growth. Retrenchment involves downsizing or divesting businesses. The document also discusses portfolio strategies, levels of diversification, reasons for diversifying, and structural forms like multidivisional structures.
Strategic Purpose
Business Level Strategy
Corporate Level and International Strategy
Strategy Direction and Methods of Developments
Organizing for Strategy Success
Enabling Strategy Success
Managing Strategic Change
Understanding Strategy Development
Key Learning Points
This document outlines different types of strategies that organizations can pursue, including long-term objectives, integration strategies, intensive strategies, diversification strategies, defensive strategies, and Michael Porter's five generic strategies. It provides guidelines for when each type of strategy may be an effective option, such as pursuing market penetration when current markets are not saturated. Integration strategies like forward and backward integration aim to gain control over distributors/suppliers or competitors. Diversification can be related or unrelated, and defensive strategies include retrenchment, divestiture, or liquidation in difficult situations.
Strategy involves determining long-term goals and adopting actions to achieve them. There are two levels of strategy - corporate and business unit. Corporate strategy focuses on what industries a firm should operate in, while business unit strategy focuses on how individual units will compete. Control systems must also align with strategy. Highly diversified firms require more arm's length control while related diversified firms benefit from resource sharing. At the business unit level, strategies include build, hold, harvest, and divest depending on industry lifecycle stage. Low cost, differentiation, and focus are common competitive strategies.
Entrepreneurship in India has grown significantly since independence. The government implemented policies to promote small and medium enterprises and provide incentives to new entrepreneurs. This led to rapid growth of small scale units. Government also established many institutions to support entrepreneurship development through training and other programs. Overall, government policies and initiatives have helped boost entrepreneurship in India and spread it across more industries and regions.
What is Strategy? An Introduction to Strategic Positioning and FitTim R. Holcomb, Ph.D.
"What is Strategy?" provides an overview of strategy, introducing important concepts such as strategic positioning, strategic fit, and competitive advantage.
This chapter discusses tools and concepts for analyzing and developing international business strategy. It examines industry structure and competition, and uses value chain analysis to identify a firm's internal capabilities for competitive advantage. An effective international strategy depends on properly configuring and managing a global value chain. Firms must balance global integration through standardization with local responsiveness. Strategies include multidomestic, international, global, and transnational approaches. The chapter outlines these concepts and how industry, strategy, and the value chain framework can be used to create value in international markets.
1LO1Understand when and how diversifying into multipl.docxfelicidaddinwoodie
1
LO1 Understand when and how diversifying into multiple businesses can enhance shareholder value.
LO2 Gain an understanding of how related diversification strategies can produce cross-business strategic fit capable of delivering competitive advantage.
LO3 Become aware of the merits and risks of corporate strategies keyed to unrelated diversification.
LO4 Gain command of the analytical tools for evaluating a company’s diversification strategy.
LO5 Understand a diversified company’s four main corporate strategy options for solidifying its diversification strategy and improving company performance.
8-‹#›
2
Crafting a Diversified Company’s
Overall Corporate Strategy
Picking new industries to enter and deciding
on the means of entry
Pursuing opportunities to leverage cross-business value chain relationships into competitive advantage
Establishing investment priorities and steering corporate resources into the most attractive business units
Initiating actions to boost the combined performance of the corporation’s collection
of businesses
8-‹#›
3
Strategic Options for
Diversified Corporations
Broadly restructuring the business
lineup with multiple divestitures
and/or acquisitions
Sticking with the existing business
lineup and pursuing opportunities presented by these businesses
Retrenching to a narrower scope of diversification by divesting poorly performing businesses
Broadening the scope of diversification
by entering additional industries
Strategic Options
8-‹#›
When Business Diversification
Becomes a Consideration
Diversification is called for when:
There are diminishing growth prospects in the present business
An expansion opportunity exists in an industry whose technologies and products complement the present business
Existing competencies and capabilities can be leveraged by expanding into an industry that requires similar resource strengths
Costs can be reduced by diversifying into closely related businesses
A powerful brand name can be transferred to the products of other businesses
8-‹#›
5
Building Shareholder Value:
The Ultimate Justification for
Business Diversification
Industry attractiveness test
Better-off
test
Tests for building shareholder value through diversification
Cost-of-entry
test
8-‹#›
6
Building Shareholder Value:
The Ultimate Justification for
Business Diversification
Diversification may result in building shareholder value if it passes three tests:
Industry Attractiveness Test—the target industry presents good long-term profit opportunities.
Cost of Entry Test—the cost to enter the target industry does not erode its long-term profit potential.
Better-Off Test—the firm’s businesses will perform better together than as stand-alone firms, producing
a synergistic 1+1=3 effect on shareholder value.
8-‹#›
7
Approaches to Diversifying
the Business Lineup
Diversification by acquisition of an existing business
Using joint ventures to achieve diversification
Options for entering new in ...
This chapter discusses corporate strategy and capital allocation. It covers key concepts like grand strategy, diversification strategy, portfolio strategy, and business level strategy. Grand strategies discussed include concentration, vertical integration, concentric diversification, and conglomerate diversification. The chapter also discusses the pros and cons of diversification and different frameworks for analyzing a company's portfolio of businesses, including the BCG matrix, GE's stoplight matrix, and McKinsey matrix. It emphasizes the importance of portfolio configuration and the role the corporate center can play in adding value through activities like industry shaping, deal making, and allocating scarce assets. Potential barriers to effective corporate portfolio management are also outlined.
This document provides an overview of business strategy concepts. It defines strategy and outlines its key features and benefits. The document then discusses the strategic intent process, including vision, mission, objectives, formulation, implementation, and evaluation. It covers different types of strategies such as integration, intensive, diversification, and defensive strategies. The document also explains the three levels of strategy - corporate, business, and functional - and provides details on corporate and business-level strategies. Finally, it introduces the Boston Consulting Group (BCG) matrix model for portfolio analysis.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Every business, big or small, deals with outgoing payments. Whether it’s to suppliers for inventory, to employees for salaries, or to vendors for services rendered, keeping track of these expenses is crucial. This is where payment vouchers come in – the unsung heroes of the accounting world.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
1. CORPORATE
STRATEGY
Presented By : GROUP 1
YULIA 360096
AFRIMAWIDANTI 372406
ST. IBRAH MUSTAFA KAMAL 372571
DIAH ASTRINIAMIR 372634
AHMAD MAULIN NAUFA 374007
4. THREE EXPLANATIONS OFWHEN VERTICAL INTEGRATION OR
HIERARCHICAL GOVERNANCE, CAN CREATE VALUE FOR A FIRM
Transactioncost
economics
• Exchange subject to high
threats of opportunism
due to high transaction-
specific investments
should be vertically
integrated
• Exchange subject to high
threats of opportunism
due to uncertainty and
complexity should be
vertically integrated
Capabilitytheory
• When another firm has
valuable, rare, and costly to
imitate resources that are too
costly to acquire, don’t
vertically integrate the
exchange with this firm
(despite threats of
opportunism)
• Vertically integrate in
business function in which a
firm enjoys valuable, rare and
costly to imitate resources
and capabilities
Realoptionstheory
• To retain
flexibility,
exchenges
characterized
by high levels
of
uncertainty
should not be
vertically
integrated
Don’t do it unless there are really good reasons
to do so!
7. Rare Vertical Integration Strategies
Differences in the ability to analyze uncertain
and complex transactions.
Differences in the ability to conceive of and
implement governance mechanism.
Differences in the propensity to behave
opportunistically.
Rare uncertainty and vertical integration.
Rare vertical disintegration.
The Imitability of Vertical Integration
Direct duplication of vertical integration
Substitutes for vertical integration
10. THE VALUE OF MERGER AND
ACQUISITION STRATEGIES
Market Context
Merger dan akuisisi
memungkinkan suatu
perusahaan
menggunakan
competitive opportunities
atau neutralize threats,
dimana M&A
memungkinkan
perusahaan untuk
mengurangi cost dan
meningkatkan revenue.
Strategi ini economically
valuable.
Dua konteks M&A:
1. The unrelated case
2. The related case
11. Mergers & Acquisitions Defined
MERGERS ACQUISITION
Two firms are combined
on a relatively co-equal
basis
One firm buys another
firm
The words are often used interchangeably
even though they mean something very
different
Merger sounds more amicable, less
threatening
12. Mergers & Acquisitions Defined
Parent stocks are
usually retired and
new stock issued.
Name may be one
of the parent’ or a
combination.
One of the parents
usually emerges as
the dominant
management.
Can be a controlling
share, a majority, or
all of the target
firm’s stock.
Can be friendly or
hostile.
Usually done
through a tender
offer.
MERGERS ACQUISITION
13. Do Mergers and Acquisitions
Create Value?• The Logic
Unrelated M&A Activity
• There would be no expectation of value creation
due to the lack of synergies between businesses.
• There might be value creation due to efficiencies
from an internal capital market.
• There might be value creation due to the
exploitation of a conglomerate discount.
A corporate raider who buys and restructures
firms
14. Mergers and Acquisitions: The Unrelated Case
NPV(A+B) = NPV (A) + NPV (B)
P = NPV (A+B) – NPV (A)
Mergers and Acquisitions: The Related Case
Types of Strategic Relatedness:
1. FTC Categories of M&A
2. Lubatkin’s (1983)
3. Jensen and Ruback’s (1983)
17. Do Mergers and Acquisitions
Create Value?
• The Logic
• Transferring
competencies
• Sharing
infrastructure, etc.
Related M&A Activity
Value creation would be expected due to synergies
between divisions
Economies of scale
Economies of scope
18. The Empirical Evidence
Research is based on stock market reaction to the
announcement of M&A activity.
This reflects the market’s assessment of the
expected value of the merger or acquisition.
These studies look at what happens to the
price of both the acquirer’s stock and the
target’s stock.
Thus, we can see who is capturing any expected
value that may be created.
19. The Empirical Evidence
•M&A activity creates value, on average, as
follows:
•Related M&A activity creates more value
than unrelated M&A activity.
Target
Firms
Acquiring
Firms
No value created
Value increases by
about 25%
M&A activity creates value, but target firms capture it
21. Free Cash Flow
•Perusahaan yang memiliki excess FCF harus
bisa memutuskan apa yang harus dilakukan
dengan excess FCF tersebut.
•Alternatif:
-Memberi stock dividen atau stock buyback
-Strategi merger dan akuisisi
22. Agency Problem
•Merger dan akuisisi memberi pengaruh positif
langsung kepada manajer, yaitu:
a) Membantu manager mendiversifikasi
investasi human capital dalam perusahaan
b) Membantu mempercepat peningkatan
ukuran perusahaaan, diukur baik penjualan
atau aset
23. Managerial Hubris
•Keyakinan atau percaya diri manajer bahwa
mereka mampu mengatasi aset perusahaan yang
ditargetkan lebih efisien dibandingkan
perusahaan yang ditargetkan yang menangani.
•Asumsinya: economic value bidding firm akan
turun saat melakukan merger atau akuisisi
24. Merger and Acquisitions and
Sustained Competitive Advantage
•Valuable, rare and private economies of scope
between bidding and target firms
•Valuable, rare and costly-to-imitate economies of
scope between bidding and target firms
•Unexpected valueable economies of scope between
bidding and target firms
25. Rules for Bidding Firm Managers: (to get superior
performance after merger and acquisition)
• Search for valuable and rare economies of scope (avoid to
multiple bidders value a target in the same way)
• Keep information away from other bidder (tetap menjaga
rahasia informasi mengenai bidding process)
• Keep information away from target (menjaga rahasia nilai
yang dimiliki target firm agar tidak memberi tahu bidding
company yang lain)
• Avoid winning bidding wars (biasanya perusahaan yang
memenangkan akan membayar lebih tinggi daripada nilai
yang dimiliki perusahaan yang ditargetkan)
• Close the deal quickly
• Operate in “thinly traded” acquistion markets.
(Beroperasi pada pasar yang hanya sedikit penjual dan
pembeli dan informasi mengenai ini tidak terlalu
diketahui banyak orang)
26. Rules forTarget Firm Managers
•Seek information from bidder
•Invite other bidders to join the bidding competition
•Delay but do not stop the acquistion
27. Pengaruh dari Delay target firms:
•Menurunkan kesejahteraan pemegang model target
firm (green mail, standstill agreements, poison pilss)
•Tidak berpengaruh pada kesejahteraan pemegang
modal target firm (shark repellents, the “pac man”
defense, crown jewel sale, lawsuits)
•Meningkatkan kesejahteraan pemegang modal
target firm (Search for white knight, creation of
bidding auctions, golden parachutes)
29. Background
The best parent companies create more value in their businesses than rivals would
Two crucial questions
What businesses should this company rather than rival companies,
own, and why ?
What organizational structure management processes and
philosophy will foster superior performance from its businesses ?
1
2
Planning frameworks that corporate
level strategists have commonly used
have proven inappropriate/impractical
Most planning processes focus on
developing business level
Growth/Share
Matrix
Core
Competence
Parenting
Approach
Poor performance of companies using the
portfolio management technique and
disillusionment with diversification
Has not provided practical guidlenes for
developing corporate level strategy
lacking reliable analytical tools
Focus on the competencies of the parent organization
and on the value created from the reationship between
the parent and its businesses
30. Fit between a parent and its
businesses is a two edged sword
OIL COMPANIES
(sales : -17 %)
MINERAL BUSINESS
Fit between a parent and its businesses is a two edged sword: a good fit can create value;
a bad one can destroy it.
31. Assessing Fit
1. Examine the critical success factors
of each business
2. Document areas in the businesses in
which performance can be improved
A structure analysis cannot replace judgement. Managers must be hinest about their own
strenths and weaknesses.
32. Making Changes to Improve Fit
Managers make their biggest mistake with businesses that fit in parenting opportunities
but not in critical success factors
2
Have opportunities to improve that the parent
knows how to address and they have critical
success factors the parent understand well
Some parenting characteristics fit, others
not
Potential for further value creation is low but
the business fits comfortably with the
parenting approach
Little potential for value creation and some
possiblity of value destruction
Businesses with a fit in parenting
opportunities but misfit in critical success
factors
33. Changing Parenting Characteristics
Which businesses belong in a parents portfolio ?
Parenting Advantage = semakin fit antara parent dan
businesses maka create value
Parenting Disadvantage = semakin missfit antara
parent dan businesses maka akan destroy value
34. CREATING CORPORATE
ADVANTAGE
Presented By: Ahmad Maulin Naufa
Collins, D.J. And C.A. Montgomery (1998)
“How can you tell if your company is really more than the sum of its parts? “
35. Introduction
•Most multibusiness companies are the sum of their
parts and nothing more.
•Don’t destroy value at the corporate level, but neither
do they create it
•Executives were focusing on individual elements of
corporate strategy: resources, business or organization.
•The essence of corporate advantage - the way a
company creates value through the configuration and
and coordination of its multibusiness activities
38. Newell's Corporate Advantage
•In 1966, Daniel Ferguson, a Stanford M.B.A., he became
CEO of Newell,"We realized we knew how to make a high-
volume, low-cost product, and we knew how to relate to and
sell to the large mass retailer.“
•In July 1967, Ferguson wrote out his strategy for Newell,
identifying its focus as the market for hardware and do-it-
yourself products. "Newell defines its basic business as that
of manufacturing and distrihuting volume merchandise lines
to the volume merchandisers. A combination or package of
lines going to the large retailers carries more marketing
impact than each line separately, and Newell intends to build
its growth through performance and marketing leverage of
this package."
39. Resources and Businesses
•The relatedness across its businesses comes not from
similarities in the products themselves but from the
common resources they draw.
•How do we know tbat Newell has the right balance of
resources and businesses? Because the firm's corporate
capabilities enhance the competitiveness of every
business it owns.
•The company's resources define the businesses that
make sense for it to own and those that do not. Newell
will never eompete in high-tech, seasonal, or fashion
produets hecause they require skills the company
doesn't have.
40. Organization
•A great corporate strategy begins with a vision of how a
eompany's resources will differentiate it from
competitors across multiple businesses.
•Much of Newell's know-how and experience is
embedded in its managers. To leverage that resource,
Newell deliberately moves managers across business
units and from the husiness to the corporate level
•the benefits of such transfers can be fully realized
because of the commonalities across its businesses-and
that is not an accident hut a result of forethought
41. Control Systems
•Without the appropriate control systems, the corporate
center can quickly lose its ability to determine strategic
direction and influence performance in the individual
businesses.
•Newell's system of operating controls fits its strategy of
leveraging the experience of senior managers.
•Compensation systems are always central to control
systems. Newell’s, To facilitate transfers, compensation
is uniform across divisions,- base salaries are
determined by position and division size.
42. Corporate Office
•A thoughtful observer would understand Newell's
corporate strategy by walking around its headquarters
and noting who was there and what they were doing-a
simple mirror of any strategy.
•From the top down, Newell maintains a culture deeply
permeated hy the expectation that it will he a leader in
serving the needs of discount retailers
•As Daniel Ferguson explains, "Like everything else we do
in marketing to the mass retailer, the more they see us as
an effective partner, the greater the edge we have when a
certain product comes up for review."
43. The Lessons of Newell
•First, corporate strategy is guided by a vision of how a
firm, as a whole, will create value.
•Second, corporate strategy is a system of
interdependent parts.
•Third, corporate strategy must be consistent with, and
capitalize on, opportunities outside tbe company.
•Fourth, tbe benefits of corporate membership must be
greater than the costs.
44. Sharing Resources at Sharp
• Resources and Businesses. Sharp's valuable resources are a set of
specialized optoelectronics technologies that contributes to the
competitive advantage of the company's core businesses.
• Organization. Sharp's technological investments share several
characteristics: they tend to he expensive, they often have substantial
lead times, and the advantages they confer in produets may be
shortlived because of imitation or brief life cycles
• Coordination. The need to share activities determines Sharp's basic
structure.
• Control Systems. Because of the blurred accountability that results
from its functional structure. Sharp requires a very different control
system than a simple divisional P&L.
45. Controls and Incentives atTyco
• Resources and Businesses. "Wbat's special aboutTyco," says CEO
Dennis Kozlowski, "are its financial controls, good incentive
programs, strong manufacturing, and operating managers who are
highly motivated by incentives and who enjoy working witbout a
whole lot of group support.“
• Organization. Ratber than reaching for specific synergies across its
groups, Tyco uses the general resources of the corporation to
encourage the division presidents to act like entrepreneurs within
their groups, and to focus on expanding the scope and profitability
of those units.
46.
47. No One Right Strategy
• That's because every company starts at a different point, operates
in a different context, and has fundamentally different kinds of
resources. There is no best prescription for all multibusiness
corporations.
• When corporate strategy adheres to this logic, a company can
create a meaningful corporate advantage. failure of Saatchi and
Saatchi - at one time the world's largest advertising agency and
now, renamed Gordiant, a shadow of its former self.
• Saatchi’s failure to understand the control requirements of
different business undercut the enterprise.
48.
49. ManyWays to Succeed
• The fact that there are potentially an unlimited variety of effective
corporate strategies does not mean that most corporate strategies
are effective.
• The resource continuum and the range of strategies it
encompasses provides a useful starting point for benchmarking the
effectiveness of your corporate strategy.
• There are many ways to succeed. Creativity and intuition are
hallmarks of great corporate strategies. Ultimately, strategies that
prevail are well-constructed systems that deliver tangible benefits.