bmgt364.10.4.2010

bmgt364.10.4.2010 - Business Strategy The major actions by...

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© 2005 Robert H. Smith School of Business University of Maryland Business Strategy The major actions by which an organization competes in a particular industry or market. - Low-cost strategy : a strategy an organization uses to build competitive advantage by being efficient and offering a standard, no-frills product. -Differentiation : a strategy an organization uses to build competitive advantage by being unique in its industry or market segment along one or more dimensions.
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© 2005 Robert H. Smith School of Business University of Maryland ALDI Grocery chain, with over 7,500 stores worldwide. Main operations are in Germany, where it has a 40% share of the grocery market, accounting for around two thirds of its sales. ALDI has around 850 stores in 27 US states.” “Incredible Value Every Day.” http://media.abcnews.com/Business/ConsumerFinance/story? id=6322672&page=1
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© 2005 Robert H. Smith School of Business University of Maryland Execution Execution is is strategy.” strategy.” —Fred Malek —Fred Malek
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© 2005 Robert H. Smith School of Business University of Maryland Execution is a systematic process of rigorously discussing hows and whats, tenaciously following through, and ensuring accountability.” —Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done
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© 2005 Robert H. Smith School of Business University of Maryland Study * Definitions of failure range from no net growth to inferior stock performance relative to industry Source: The Art of M&A Integration; industry literature AT Kearney (1998) 66 KPMG (1999) 57 58 83 McKinsey (2000) 70 70 Mercer (1996) Coopers & Lybrand (1996) KPMG (2001) 70 Percent failed* Study Percent failed*
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© 2005 Robert H. Smith School of Business University of Maryland So Why Do it at All? Immediate growth (faster than organic growth) Platform for future growth Capabilities Cost reduction – many suspect that these are the only “real” synergies Industry consolidation
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© 2005 Robert H. Smith School of Business University of Maryland Why are There so Few Winners? Poor deal • Unrealistic synergies • Price too high • Competitor reactions Good deal poorly implemented • Poor integration management • Failure to address cultural differences • Customer losses • Poor communication • Poor tracking 70 30 Source: McKinsey & Company
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© 2005 Robert H. Smith School of Business University of Maryland “A Merger of Equals” “A Match Made in Heaven”
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© 2005 Robert H. Smith School of Business University of Maryland Merger Saga of DaimlerChrysler
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© 2005 Robert H. Smith School of Business University of Maryland Chronology in the merger saga of DaimlerChrysler May 7, 1998: Daimler-Benz's Juergen Schrempp and Chrysler Corp.'s Robert Eaton announce US$36 billion merger that creates DaimlerChrysler AG. Jan. 6, 1999: DaimlerChrysler stock hits US$108 per share.
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This note was uploaded on 04/09/2012 for the course BMGT 364 taught by Professor Wellman during the Fall '08 term at Maryland.

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bmgt364.10.4.2010 - Business Strategy The major actions by...

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