Post-Acquisition Integration Simulation
MegaMouth
Acquires
Chewicalia
Country of Tropicalia
Country of Tropicalia
Global Market for MSTs
ParaSonic
ElectroEnamel
EuroSoundFinland
TanakaTooth(Japan)
MegaMouth(USA)
Chewicalia
TropiDent
Country of Tropicalia
Country of Paradiso
Global Market for MSTs
ParaSonic
ElectroEnamel
EuroSoundFinland
TanakaTooth(Japan)
MegaMouth(USA)
Chewicalia
TropiDent
Structure of Acquisition
• Equity: 82% MegaMouth -- 18% Chewicalia• Technology: Use MegaMouths’s technology
developed in USA• Manufacturing: Chewicalia will serve as one of
MegaMouth’s global manufacturing center • Marketing/Distribution: MegaMouth will control all
marketing in Tropicalia• Integration Strategy: Be more efficient, cut local
manufacturing lines and employees, use USA-developed technology
Acquisition Decision – Then…• Strategy – Deal • Due Diligence• Payment• Integration Strategy
– Synergies, Assimilation, Combination, Rationalization, etc.
• Integration Implementation/ExecutionIntegration Implementation/Execution– Value chain activitiesValue chain activities– Systems, processes, SOPsSystems, processes, SOPs– Culture, organizational issues, politics, emotions, etc.Culture, organizational issues, politics, emotions, etc.
– PEOPLEPEOPLE
Strategy vs. SupportStrategy vs. Support
Integration Strategy• Product
– Use MegaMouths’s existing technology from USA Headquarters– Cut Chewicalia’s R&D
• Manufacturing– Chewicalia becomes global manufacturing center for MegaMouth
using the USA-developed technology– Cut one or two production lines
• Marketing– MegaMouth controls all marketing/sales is Tropicalia– Up to 50% of Chewicalia’s salespersons’ pay is commission
Integration Strategy• HRM
– Cut 1,500 or 750 Chewicalia jobs
– Pay is 50% wages + 50% (or more) piecework
– Cut R&D staff 120 jobs or 60 jobs
• R&D– Competing R&D teams
• MegaMouth vs. Chewicalia
• Winner gets 2 extra week holiday
• Logistics– Use JIT system
– Close Chewicalia’s warehouses
– Cut local Tropicalia-based sourcing by 50%, source globally
Simulation Teams
Post-Acquisition Integration Leadership Team (PAILT)
MegaMouth TMT
Chewicalia TMT
Chewicalia HR
Chewicalia R&D
Chewicalia Manufacturing
Chewicalia Marketing
Tropicalia Government
Tropicalia Labor Union
Tropicalia Customer 1
Tropicalia News Media
Play the role
Simulation Process• Determine your team’s initial level of Determine your team’s initial level of support or support or
oppositionopposition for all elements of the integration for all elements of the integration strategystrategy– Scale ranges from:
• Strong Opposition (1) • Strong Support (5)
– Iterative process – new information will change assessment
• Find out what other teams think…Let other teams Find out what other teams think…Let other teams know what you thinkknow what you think
• Adjust your support as necessaryAdjust your support as necessary• PAILT and MegaMouth’s TMT may adjust the PAILT and MegaMouth’s TMT may adjust the
strategystrategy
Team Support Level Data Form
Page 10
What MegaMouth What MegaMouth Wants Wants vs. What MegaMouth vs. What MegaMouth May GetMay Get
What MegaMouth What MegaMouth AdjustsAdjusts vs. What MegaMouth vs. What MegaMouth Will GetWill Get
Timeline
10:3010:30 – Submit Initial Support Scores
10:30-11:3010:30-11:30 – Influence Other Teams
11:35 11:35 – Submit Updated Support Scores (PAILT submits Final
Integration Plan)
11:45-12:0011:45-12:00 – Debrief/Discussion
Debrief
• What happened?
• Surprised?
• Conclusions
