C39 CN Tutorial 5 - Joint Ventures and Strategic Alliances Answers.doc

Y have different brand name reputational reasons

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y have different brand name – reputational reasons Limited liability of JV Less unambiguous than SA. Specific commitment. 4. What were the synergies and or complementarities in the Nissan-Renault Strategic Alliance? Joint Purchasing Renault – expertise diesel powertrain, Nissan – expertise petrol poewertrain Nissan – expertise manufacturing, Renault – expertise finance Efficiency from sharing engine types 5. Compare and contrast acquisitions with joint ventures/strategic alliances Acquisitions a. Rapid augmentation of firm capabilities b. Consequences are long lasting c. Often costly due to takeover premium d. Challenges of combining organizations Joint ventures/Strategic Alliances e. Reduce relative size of investments and risks f. Create new entities and relationships g. Can develop learning and new opportunities h. Can be seen as a real option Real options is the school of thought that the ability to change direction has value over and above the direct NPV expected from investments such as M&A, JV, SA. In particular, JV or SA may have considerable real option value as they increase flexibility. 6. What are the main empirical findings for the impact of joint ventures on shareholder wealth? McConnell and Nantell (1985) Studied 136 joint ventures 1972-1979 involving 210 companies Found positive shareholder wealth effects on announcement of 0.73% Woodbridge and Snow (1990)
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  • Fall '17
  • JPM
  • FTSE 100 Index, joint venture, Joint Ventures and Strategic Alliances

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