•Evaluation requires examining:–Financing of the intended transaction–Differences in culture between the firms–Tax consequences of the transaction–Actions necessary to meld the two workforcesAttributes of Effective Acquisitions1.Low to Moderate Debt: (Result) Merged firm maintains financial flexibility2.Sustained emphasis on Innovation: (Result) Continue to invest in R&D as part of the firm’s overall strategy3.Flexibility: (Result) Has experience at managing change and is flexible and adaptable RestructuringRestructuring: A strategy through which a firm changes its set of businesses or financial structure.
–Failure of an acquisition strategy often precedes a restructuring strategy.–Restructuring may occur because of changes in the external or internal environments.•Restructuring strategies:–Downsizing–Downscoping–Leveraged buyoutsCHAPTER 8: International StrategyIdentifying International OpportunitiesInternational Strategy: A strategy through which the firm sells its goods or services outside its domestic market.•Incentives to use international strategyNew market expansion extends product life cycle.Gain access to materials and resources.Integration of operations on a global scaleBetter use of rapidly developing technologiesInternational markets yield potential new opportunities.International Strategy Benefits•Increased Market SizeDomestic market may lack the size to support efficient scale manufacturing facilities.•Economies of Scale (or Learning)Expanding size or scope of markets helps to achieve economies of scale in manufacturing as well as marketing, R&D or distribution.Can spread costs over a larger sales base.Can increase profit per unit.•Location AdvantagesLow cost markets aid in developing competitive advantage by providing access to:•Raw materials•Transportation•Lower costs for labor•Key customers•EnergyDeterminants of National Advantage (6):•Factors of production: The inputs necessary to compete in any industry (labor, land, natural resources, capital, infrastructure)•Basic factors: Natural and labor resources•Advanced factors: Digital communication systems and an educated workforce•Demand Conditions: Characterized by the nature and size of buyers’ needs in the home market for the industry’sgoods or services.Size of the market segment can lead to scale-efficient facilities.Efficiency can lead to domination of the industry in other countries.Specialized demand may create opportunities beyond national boundaries.•Related and Supporting Industries: Supporting services, facilities, suppliers and so on.Support in designSupport in distributionRelated industries as suppliers and buyers•Firm Strategy, Structure and Rivalry: The pattern of strategy, structure, and rivalry among firms.
You've reached the end of your free preview.
Want to read all 20 pages?
- Spring '10
- Management, strategic action, Cooperative Strategy