Alliance and Acquisition ch12 part 2

Alliance and Acquisition ch12 part 2 - Relax rules on...

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Click to edit Master subtitle style 1/22/11 Alliance and Acquisition What is strategic alliance? Why alliance? Institutional Impact on alliance Advantages and disadvantages of alliance Strategic vs organizational fit
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1/22/11 What is strategic alliance, and why? A voluntary agreement between firms involving exchange, sharing, or co-developing of products, technologies, or services Why? Synergistic: leverage superior resources Hubristic: overconfidence of acquiring
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1/22/11 Institutional Impact on alliance Antitrust law E.g., the proposed merger of American Airline and British Airway was blocked by both US and UK antitrust authorities Entry mode restrictions E.g., India, foreign firms engaging in retail can only own up to 51%, therefore JV. Walmart + Bharti formed Bharti- Walmart
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1/22/11 Trend of Institution influence
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Unformatted text preview: Relax rules on foreign firms ownership E.g., Mexico and S. Korea now allow foreign firms fully operating in their countries Strategically important industry still protected E.g., car industry in China, oil industry in Russia only allow JV 1/22/11 Advantages and disadvantages of alliance Advantages Reduces costs and risks Tap into partners assets and learning Real options to have the right to invest more Disadvantages Wrong partner Partner opportunism e.g., Honda and 1/22/11 Strategic vs organizational fit Strategic Fit The effective matching of complementary strategic capabilities between firms Organizational Fit The similarity in cultures, systems, and structures between firms...
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Alliance and Acquisition ch12 part 2 - Relax rules on...

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