international business strategy 301lon mergers, acquisitions & strategic alliances unit: 10...
TRANSCRIPT
![Page 1: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/1.jpg)
![Page 2: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/2.jpg)
International Business Strategy301LON
Mergers, Acquisitions&
Strategic Alliances
Unit: 10 Knowledgecast: 1
![Page 3: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/3.jpg)
• Integrate and apply strategic approaches to practical situations in various types of organisations
• Assess current developments in the organisational environment and alternative responses related to strategy
• Resolve management problems in the area of strategic management by evaluating alternative outcomes
Module Learning Outcomes
![Page 4: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/4.jpg)
The importance of collaborative arrangements
The number of strategic alliances is growing at an average of approximately 25% per year and it has almost doubled in the past 10 years and is expected to increase even more in the future (Zineldin, Dodourova, 2005; Hall, 2008).
On average, the top 500 global companies each participate in 60 major strategic alliances (Dyer, Kale and Singh, 2001).
![Page 5: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/5.jpg)
Need for M&A and Strategic Alliances
“It is no longer an era in which a single company can dominate any technology or business by itself. The technology has become so advanced, and the markets so complex, that you simply can’t expect to be the best at the whole process any longer” (Fumio Sato, Toshiba’s CEO)
![Page 6: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/6.jpg)
Strategic alliances in the airline industry
![Page 7: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/7.jpg)
LG’s strategic alliances
Source: http://www.lge.com/about/corporate/corporateinfomation.jsp
![Page 8: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/8.jpg)
Definitions
Merger “can be defined as the coming together of two or more enterprises to form a new enterprise” (Cowling et al., 1980: 1)
An acquisition occurs when the management of an acquiring firm makes a direct offer to the shareholders of the target firm, taking control of it.
In Mergers the assets of two previously separate firms are combined to establish a new legal entity. Acquisitions are when assets of the acquired company are absorbed by the acquirer and the target company disappears (Buckley and Ghauri, 2002).
![Page 9: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/9.jpg)
Definitions
Strategic Alliances are:“associations important to alliance partners and formed to further their common interests” (Mockler, 2000:1).
Are agreements between firms in which each commits resources to achieve a common set of objectives (Bains and Company).
![Page 10: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/10.jpg)
Differences between M&A and alliances
remain independent
In both cases organisations contribute with a specific set of resources and competencies creating value for both; supposedly more value than what they would have created on their own. Both share the benefits.
definite
high level of control
temporary
lower level of control
same corporate parent single entity
M&A Alliances
![Page 11: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/11.jpg)
Motives for M&A and strategic alliances
Entry to new markets or market segments
The achievement of economies of scale, scope and synergies
Low cost of labour
Share investments / risks
Access to new technology, know-how and techniques
Acquisition of resources and competences
Development speed
Legislation
Host country may require some local ownership
Agency theory: managers self interest, vanity, power, status
(Kitching, 1967; Aaronovitch and Sawyer, 1975; Meeks, 1977; Fairburn and Kay, 1989; Green, 1990; Bleeke and Ernst, 1993; Schweiger, Csiszar, and Napier, 1993; Pritchett, Robinson and Clarkson, 1997; Capron, 1999; Inkpen, Sundaram, and Rockwood, 2000; Seth, Song and Pettit, 2000; Mockler, 2000; Testa, and Morosini, 2001; Griffiths and Wall, 2001; Thompson, 2001; Buckley and Ghauri, 2002)
![Page 12: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/12.jpg)
Performance of Strategic Alliances
![Page 13: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/13.jpg)
Group discussionWhat are the main motives why most M&A and alliances
fail?
Activity
![Page 14: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/14.jpg)
Why is it that more than 50% Fail?
Strategic analysis and choice
Implementation
Post-agreement Process
Pre-agreement Process
Performance of M&A and Strategic Alliances
![Page 15: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/15.jpg)
• Integrate and apply strategic approaches to practical situations in various types of organisations
• Assess current developments in the organisational environment and alternative responses related to strategy
• Resolve management problems in the area of strategic management by evaluating alternative outcomes
Knowledgecast Summary
![Page 16: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/16.jpg)
![Page 17: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/17.jpg)
End of Module Assessment – Evaluating internationalization
Strategy (Management Brief) (Unit 10)
Preparation – Preparing the Final Draft
This session will provide you with the opportunity to discuss your final draft with your module tutor and ensure all your questions are
answered as you finalize your submission.
Although this is an independent piece of work giving and receivingfeedback from your peers is an essential skill, which will be of greatvalue in the workplace.
Be prepared to provide constructive feedback on other’s work andreceive feedback which can inform your progress.
Seminar
![Page 18: International Business Strategy 301LON Mergers, Acquisitions & Strategic Alliances Unit: 10 Knowledgecast: 1](https://reader035.vdocuments.mx/reader035/viewer/2022062309/56649e4f5503460f94b46302/html5/thumbnails/18.jpg)
Module ReviewIn this session you will be required to give feedback on the
module via the usual course evaluation mechanisms. This may include aconsideration of the following questions.
1. Which of the units of the module have been most interesting to you?
2. How will your study of international business strategy affect your future business practice?
3. What do you consider to be the challenges for those involved in international business strategy?
Group Activity