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Strategic Management in Global Environments

Strategy formulation-implementation analysis

Guide & template

Core values

Core values are typically referenced in CEO statements or letters. They can also be extracted from Mission/Vision documents.

Mission/Vision/Strategic Intent

Look at core elements in these statements. Evaluate for clarity.

Capabilities

Core competency/ies

What is the company’s resource base? What are their core competencies? Rigidities? Opportunities to develop new competencies?

Strategy

Evaluate strategies as formulated, across all relevant levels: business, corporate, international. Make note of gaps between formulated and actualized strategy. Look for congruence and discordance.

Structure

Analyze the organizational charts at business, corporate, and international levels. What type of structure does the organization use? What are the characteristics of their structure? What is emphasized in the structures? Can you learn anything about procedures and policies that is relevant to strategic implementation?

Corporate governance

How is the company governed? Evaluate the composition of the BOD, executive team, any subcommittees. Analyze compensation and recent executive personnel changes.

Organizational culture

What are the main characteristics of the organizational culture?

Performance controls

Examine how the company measures performance and controls for gaps between forecasted and achieved. Look for quantitative and qualitative metrics in categories such as, financial, operational, reputation, human resources, innovation, etc.

Rewards

How does the company reward employees? Look for information about employee compensation, such as salary, benefits, work/life balance, work environment, etc.

The purpose of this analysis is to evaluate how companies formulate and implement strategies. In the process, you will observe the extent to which implementation elements align with the company’s strategic intent and core values. This exercise also allows you to find gaps in implementation practices. Strategy implementation is not always a linear and rational process. Identifying gaps provides opportunities to find needed solutions and career advancement.

Use the form on the following page as template for your analysis. Use the “Ascore“ to evaluate how the elements of strategy align with the company’s core values (0-4, where ‘0’=no alignment and ‘4’=excellent alignment).

Strategy formulation-implementation analysis tool

Company name

Ascore

Core values

Mission/Vision/Strategic Intent

Capabilities

Core competency/ies

Strategy

Structure

Corporate governance

Organizational culture

Performance, controls

Rewards

© Cata Ratiu, 2018

Strategic Management in Global Environments

SWOT Analysis

Strengths

· What are your strengths?

· What do you do better than competitors?

· What unique capabilities and resources do you possess?

· What do others perceive as your strengths?

Look for:

· Capabilities, core competencies, competitive advantages

· resources, assets, and people

· experience, knowledge and data

· financial reserves, returns

· marketing, reach

· innovation advantages

· location, other geographical

· price, value, quality

· processes, systems

· value proposition advantages

Weaknesses

· What are your weaknesses?

· What do your competitors do better than you?

· What can you improve given the current situation?

· What do others perceive as your weakness?

Look for:

· Lack of capabilities/competencies

· Gap in competitive strengths

· Reputation, presence and reach

· Timescales, deadlines and pressures

· Financials

· Cash flow, cash drain

· Continuity and supply chain

· Effects on core activities

· Reliability of data, plan and project

· Management cover & succession

Opportunities

· What trends or conditions may positively impact you?

· What opportunities are available to you?

Look for:

· Market developments

· Industry or lifestyle trends

· Innovation and technology development

· Global influences

· Market dimensions, horizontal or vertical

· Target markets

· Geographical (import/export)

· Major contracts, tactics and surprises

· Business / product development

Threats

· What trends or conditions may negatively impact you?

· What are your competitors doing that may impact you?

· Do you have solid financial support?

· What impact do your weaknesses have on the threats to you?

Look for:

· Political, regulatory, and economics

· Environmental issues

· Competitive intentions

· Market demand

· Loss of resources

· Obstacles to be faced

· Economic condition at home or abroad

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Links & Insights (this is the most important part of the SWOT, where you synthesize the information in the 4 quadrants, find patterns, and generate new ideas.

Strategic Management in Global Environments

10/4/21

1

ASPECTS OF
STRATEGY
IMPLEMENTATION

ORGANIZATIONAL
STRUCTURE AND
CONTROLS

1

OBJECTIVE

DESCRIBE ELEMENTS OF STRATEGY
IMPLEMENTATION AND HOW THEY HELP OR
HINDER ORGANIZATIONAL PERFORMANCE

2

PATH DEPENDENCE

¡ Any set of decisions you must
m ake, is lim ited by decisions you
have m ade in the past.

¡ i.e., H istory m atters

¡ Evolution is typically thought of
as path dependent. E.g., in
com puter/softw are industry,
legacy system s indicate path
dependence.

¡ H ighlights the critical im portance
of strategic intent

3

WHY IMPORTANT?

Organizational
structure and controls
affect firm
performance.

1
Performance declines
when strategy is not
matched with the most
appropriate structure
and controls.

2
Part of manager’s work
is to monitor alignment
and act when changes
are needed.

3

4

WHAT COMES FIRST,
STRATEGY OR
STRUCTURE?

5

Which comes
first?
IMPORTANT TO
UNDERSTAND WHAT
NEEDS TO CHANGE
FOR ALIGNMENT

6

10/4/21

2

Simple

Functional

Multidivisional

Efficient implementation of
formulated strategy usually results
in sales growth, which brings about
coordination and control problems

7

WHAT IS
STRUCTURE

¡ A firm’s formal role configuration,
procedures, governance, and control
mechanisms, and authority and
decision-making processes.

¡ Formal reporting relationships

¡ Policies, procedures, processes

¡ Controls & authority

¡ Decision making processes

8

FEATURES OF ORGANIZATIONAL STRUCTURE

STABILITY: provides the
capacity required to

consistently and
predictably manage work

routines

FLEXIBILITY: provides the
opportunity to explore

competitive possibilities &
allocate resources to value

added activities

9

STABILITY VS.
FLEXIBILITY?

10

Match structural
features with
product lifecycle
and strategy

11

STRUCTURE TYPES

Simple
Owner/manager makes all major
decisions
Difficult to maintain this structure as
the firm grows

Functional
For single or dominant-business firms

Allows to specialize tasks
Overcomes information processing
limits of owner/manager

Multidivisional
Each division operated as separate
business
Appropriate for related or unrelated
diversified businesses

Corporate managers focus on finding
and exploiting synergies

12

10/4/21

3

FUNCTIONAL
STRUCTURE FOR COST
LEADERSHIP

¡ M ay be t tall structure, w ith
m any reporting relationships

¡ O perations is the m ain
function

¡ Process engineering
em phasized

¡ R&D deem phasized

¡ Form alized procedures around

low -cost culture

¡ Job roles are highly structured

13

FUNCTIONAL
STRUCTURE FOR
DIFFERENTIATION

¡ Marketing is the main function
for keeping track of new product
ideas

¡ New product development is
emphasized

¡ Most functions are decentralized,
but R&D and MKTG have
centralized staff that work
closely with each other

¡ Formalization is limited so that
new ideas can emerge easily

¡ Structure is organic, job roles
less structured

14

TYPES OF MULTIDIVISIONAL STRUCTURES

15

COOPERATIVE
FORM –
MULTIDIVISIONAL

16

SBU FORM –
MULTIDIVISIONAL
(RELATED LINKED
STRATEGY)

17

COMPETITIVE FORM – MULTIDIVISIONAL
(UNRELATED STRATEGY)

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4

CHARACTERISTICS OF STRUCTURES

19

GEOGRAPHIC
AREA
STRUCTURE FOR
MULTIDOMESTIC
STRATEGY

20

PRODUCT
DIVISIONAL
STRUCTURE
FOR GLOBAL
STRATEGY

21

HYBRID FORM FOR IMPLEMENTING A
TRANSNATIONAL STRATEGY

22

ORGANIZATIONAL
CONTROLS

Use Use a gap analysis to determine if corrective action is needed

Suggest Suggest corrective action when the differences between actual & expected are unacceptable

Indicate Indicate how to compare actual results with expected results

Guide Guide the use of strategy

23

TYPES OF ORGANIZATIONAL CONTROLS

Strategic controls
Examine the fit between what the
firm might do and what it can do

Financial controls
Financial objective criteria used to
measure the firm’s performance

against previously established
quantitative standards

Operational controls
Quantitative and qualitative criteria
used to determine functional level
performance outcomes (e.g., HR,

logistics, customer, etc.)

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5

UNDERSTAND PERFORMANCE GAPS
AND INFORM STRATEGIC DECISIONS

Gap analysis:

25

A
RUDIMENTARY
GAP ANALYSIS
ILLUSTRATION

26

IN CONCLUSION

¡ W hy is organizational structure and controls im portant?

¡ W hat are am bidextrous organizations?

¡ W hat are the different types of structures?

¡ W hat should be em phasized in a functional structure that m atches a differentiation strategy?

¡ W hat are organizational controls?

¡ W hat are the different types of controls?

¡ W hat is a gap analysis?

¡ H ow would you design and conduct a gap analysis for your academ ic progress?

27

Strategic Management in Global Environments

10/4/21

1

How to formulate strategies?

INTERNATIONAL-LEVEL

1

Objectives:
Understand how information about external and internal

environments affects formulated strategies

Learn and synthesize strategy across levels: business, corporate,
international

How do business leaders formulate strategies for improved
performance and competitive advantage?

2

What is
strategy

formulation

PROCESS BY
WHICH AN
ORGANIZATION
CHOOSES
COURSES OF
ACTION TO
ACHIEVE ITS
DEFINED GOALS

3

Inputs
Resources
Capabilities
Competencies

Outcomes
Accounting,
Shareholder,
Stakeholder returns

Internal processes
Strategy formulation
& implementation

4

Inputs
Resources
Capabilities
Competencies

Outcomes
Accounting,
Shareholder,
Stakeholder returns

Internal processes
Strategy formulation
& implementation

Develop

vision,
m ission, core

values

Set objectives
Craft strategy

to achieve
objectives

Execute

strategy

Evaluate &

adjust

5

Strategy levels

BUSINESS CORPORATE INTERNATIONAL

6

10/4/21

2

International strategies: key questions

How to grow market
outside domestic
borders

How to enter foreign
markets

How to design global
supply and value
chains

How to manage
political and
economic risks in
global markets

7

Why go
international?
Global
opportunities

Increased market size

Return on investment

Economies of scale and learning

Location advantage

8

Where do you
internationalize?

9

Where do you
internationalize?

How about
Mexico?

San Diego—Tijuana (Tecate)

• an international transborder
agglomeration

• Largest binational conurbation between
US and Mexico

• Population over 5 million

• Economic sectors: maritime,
manufacturing, tech, tourism, etc.

• Governed by NAFTA/USMCA

10

Where do you
internationalize?

How about
Mexico?

San Diego—Tijuana—Tecate trade
opportunities

https://www.sandiego.gov/economic-
development/sandiego/trade/mexico

https://www.sandiegobusiness.o

https://www.trade.gov/

USA Trade Guide:
https://usa.think.global/utg2017/utg17/
index.html#1

Foreign Direct Investment Intelligence:
https://www.fdiintelligence.com/

11

Porter’s
Diamond of
National
Advantage

12

10/4/21

3

Hofstede’s
cultural
dimensions
Framework for cross-cultural

communication.

Culture is defined as the

collective mental programming

of the human mind which

distinguishes one group of

people from another

Describes the effects of a

society’s culture on the values

of its members, and how these

values relate to behavior. S ou rce: H ofsted e, 1 9 8 4
Learn m ore: h ttp s://w w w.h ofsted e-in sigh ts.com /p rod u ct/com p are-cou n tries/

13

U.S.A.

14

15

Strategies & entry modes
Explore your capabilities

16

International
entry modes

Export

License / Franchise

Strategic alliance

Acquire

Greenfield venture / new subsidiary

17

Export

Common way to enter international markets

No need to establish own operations in
other nations

Can enter multiple markets quickly

A lot of government support and resources
for trade initiatives

Cost significantly influenced by
transportation, tariffs

Difficult to customize product and to
maintain control over marketing and

distribution

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10/4/21

4

License

Authorize another firm to manufacture

and/or sell your products

Receive royalty on each unit produced/sold

Licensee bears the risk

Least risky way to enter foreign market

Licensor loses control over product quality,
distribution, etc.

Relatively low profit potential

19

Alliance

Partners share risks and resources

Joint ventures (JVs) typically involve foreign
co with product or tech and a host co with

access to distribution and marketing

Integration of cultures is an issue

Strategic intent differences can lead to

divergent goals

Preferred entry mode for most SMEs

20

Acquisition

Most rapid expansion mode

Can be very costly

Regulatory requirements may present
barriers to foreign ownership

Complex and costly negotiations

Corporate culture differences

21

Greenfield
venture

New wholly owned subsidiary

Most complex & costly of entry alternatives

Greatest degree of control

Potentially most profitable, if successful

Requires expertise & knowledge relevant to

host country

22

OLI/Eclectic
Paradigm
Objective: help

m anagem ent choose

between several foreign

m arket entry-m ode

strategies

To engage in FDI, com pany

needs three advantages.

Source: Dunning, 1979

23

Paradigms
for
international
strategies

24

10/4/21

5

International
strategies

S ou rce: Leh m an n , 2 0 1 0

25

Strategies

Multidomestic: strategy and
operational decisions are
decentralized to SBU in each country
to tailor products to the local market

Global: assumes more
standardization of products across
country markets

Transnational: seeks to achieve both
global efficiency and local
responsiveness

26

International risks
Political:

– government instability

– changes in local attitudes or regulation

regarding foreign ownership

– legal authority obtained from previous

administration may change

– nationalization of firms’ assets

Economic:

– interdependent of political risks

– trade wars and tariffs

– fluctuations in currency rate

– inflation rates differences

– interest rates changes and different
national bank policies

– enforcement of property rights and other

regulations

27

Doing business database
https://www.doingbusiness.org/

28

Strategic Management in Global Environments

3/3/22, 4:39 PMCitigroup Has Nearly $10 Billion in Total Russian Exposure – WSJ

Page 1 of 4https://www.wsj.com/articles/citigroup-has-nearly-10-billion-in-total-russian-exposure-11646066390

Citigroup Has Nearly $10 Billion in
Total Russian Exposure
Sanctions complicate Citigroup’s attempt to sell its
Russian consumer bank
David Benoit Feb. 28, 2022 11:39 am ET

Customers at a Citibank bank branch in Moscow on Monday.

Photo: Andrey Rudakov/Bloomberg News

Citigroup Inc. C -3.26% disclosed Monday it had nearly $10 billion in total
exposures to Russia at the end of 2021, some of which sit in a consumer
bank it has been trying to sell and may now be stuck with.

The New York giant, which bills itself as the world’s truly global bank, is by
far the most exposed of the big U.S. banks to Russia in the midst of a global

3/3/22, 4:39 PMCitigroup Has Nearly $10 Billion in Total Russian Exposure – WSJ

Page 2 of 4https://www.wsj.com/articles/citigroup-has-nearly-10-billion-in-total-russian-exposure-11646066390

sanctioning regime that is threatening Russia’s economy after its invasion of
Ukraine last week. Russia is, nonetheless, a small part of Citigroup’s $2.29
trillion in assets.

Sanctions from the U.S., Europe and countries around the world have
targeted Russia’s biggest banks, oligarchs and companies—all aimed at
pressuring Russian President Vladimir Putin after he ordered the invasion.

Citigroup operates with an on-the-ground presence in both Russia and
Ukraine, unique among U.S. banks, part of its far-reaching outposts that
help global companies move money around the world.

Its exposures to Russia include $2.2 billion in corporate loans and $700
million in consumer loans, it said in a filing Monday. It also holds $1.5 billion
in investment securities.

Outside of its Russian unit, Citigroup units around the globe also have $1.6
billion in exposures to Russian entities.

On top of those loans and investments, Citigroup added an additional
disclosure Monday that it had $1 billion in cash at financial institutions
including the Russian Central Bank and $1.8 billion in reverse repurchase
agreements with other entities.

Citigroup had halved its Russian exposures following Russia’s 2014
annexation of Crimea, and it and other banks have refrained from making
big bets on the country since then.

The bank didn’t disclose if any of its loans or assets were connected to any
sanctioned entity and didn’t provide any updates on the assets since the
war broke out.

Swift Sanctions: How Cutting Off Banks Pressures Russia

3/3/22, 4:39 PMCitigroup Has Nearly $10 Billion in Total Russian Exposure – WSJ

Page 3 of 4https://www.wsj.com/articles/citigroup-has-nearly-10-billion-in-total-russian-exposure-11646066390

Swift Sanctions: How Cutting Off Banks Pressures Russia

A powerful coalition of democracies announced it would cut off some Russian banks from the global payment

system Swift. Here’s how Swift works, and how the move could ramp up pressure on Russian President Putin.

Photo: Anton Vaganov/Reuters

Citigroup’s Russian consumer bank operates three branches in Moscow,
two in St. Petersburg and a smattering around the country. The bank had
announced it would sell the unit as it pares back its international consumer
operations. The sale was already expected to be complicated, but the
current sanctions make it harder. A foreign bank is unlikely to want more
Russian exposure and the Russian banks are now under sanction, raising
questions about who could buy it.

An official from Russian giant VTB said publicly last year his bank was
interested in bidding for the asset, but VTB is now under sanctions.

Citigroup has already been forced to shut one foreign consumer bank, in
South Korea after failing to sell it, a move that cost it more than $1 billion.
The Russian bank is far smaller.

A bank spokeswoman declined to comment about the ongoing sale.

3/3/22, 4:39 PMCitigroup Has Nearly $10 Billion in Total Russian Exposure – WSJ

Page 4 of 4https://www.wsj.com/articles/citigroup-has-nearly-10-billion-in-total-russian-exposure-11646066390

On the other side of the conflict, Citigroup has been working to ensure the
safety of some 200 employees in Ukraine. The bank evacuated foreigners
working in Ukraine weeks ago as Russia mobilized, people familiar with the
bank said. It worked to get dollars into employees’ hands and move them
around the country if they wanted, the people said.

Over the weekend, Alexander McWhorter, the head of the bank’s operations
in the country, posted on LinkedIn that he was safe and that the bank was
still working to help where it could.

Write to David Benoit at david.benoit@wsj.com

Strategic Management In Global Environments

 

Part 2: External analysis

Goals

– Map the external environment associated with the scope of your project 

– Identify existing participants and solutions currently being explored (for profit, NGO, etc.) – Gather data and conduct analyses to be used in final report 

Steps

– Consult major databases available through the library and learn about the external environment of the  issue or industry you are studying 

– Explore high quality business publications (both daily, such as WSJ, FT, as well as weekly or monthly,  such as Business Week, The Economist, Monocle, etc.) to learn about the general environment. 1. Describe what general environment dimensions affect the issue identified in your project. Provide a  complete PESTEL analysis 

2. List and describe any industries dedicated to the problem and explore their lifecycles and current  stages (typically more than one) 

3. Conduct an in-depth analysis of the industry(ies) your team considers to be most critical. Use the five  forces model to describe industry structure. 

4. What is the nature of competitive dynamics? How do industry participants compete?

5. Are there areas of cooperation among industry participants? Analyze strategic alliances, especially  those that were formed to address the general scope of your project. 

What to prepare 

A written report outlining your findings regarding steps 1–5 above. If you are unable to find useful information  for any area, explain your methods and efforts. Any worksheets used may be appended to your report. You  may use this time to prepare data visualizations to be used in the final report (i.e., tables, figures, etc.). Also  provide a list of references for all information found (APA format), with proper referencing and citations in the  text of your report. Any tables, figures, or other exhibits should contain information about the source of the  data. There is no page limit.

Strategic Management In Global Environments

 Q about

  • How to analyze, formulate, and implement international strategies?
  • Where might the firm expand outside domestic borders?
  • How might a firm enter an international market?
  • How to staff and structure international operations?

Strategic Management in Global Environments

10/4/21

1

Rivalry &
Competitive
dynamics

1

But first, Competition vs cooperation

2

What is competition?

3

Cell phone manufacturers, by market share… in units shipped

4

How to spot
competitive
industries?
1. Life cycle analysis

5

How to spot
competitive
industries?

2. Compare Return on Invested
Capital (ROIC)

Source: McKinsey, A long-term look at ROIC

6

10/4/21

2

How do firms compete?
How do we observe competition?

7
Source: Schimmer, 2012. https://www.eventstudytools.com/competitive-dynamics

How do researchers observe competitive behavior?

8

Definitions
Competitors: firms operating in the same market, offering similar products, and
targeting similar customers.

Competitive Rivalry: ongoing set of competitive actions and responses occurring
between competitors.

Influences an individual firm’s ability to gain and sustain competitive advantages.

9

Definitions…
Competitive Behavior

The set of competitive actions and competitive responses the firm takes to build or
defend its competitive advantages and to improve its market position.

Multimarket Competition

Firms competing against each other in several product or geographic markets.

Competitive Dynamics

The total set of actions and responses taken by all firms competing within a
market.

10

11

Strategy & Rivalry
Success of a strategy is determined by:

– the firm’s initial competitive actions.
– how well it anticipates competitors’ responses to them.
– how well the firm anticipates and responds to its competitors’ initial actions.

Competitive rivalry:

– affects all types of strategies.
– has a dominant influence on the firm’s business-level strategy or strategies.

12

10/4/21

3

Firms are mutually interdependent when:

– a firm’s competitive actions have noticeable effects on its competitors.
– a firm’s competitive actions elicit competitive responses from its competitors.
– competitors feel each other’s actions and responses.

Marketplace success is a function of both individual strategies and the
consequences of their use.

13 14

Competitor analysis
Competitor analysis is used to help a firm understand its competitors.

The firm studies competitors’ future objectives, current strategies, assumptions,
and capabilities.

With the analysis, a firm is better able to predict competitors’ behaviors when
forming its competitive actions and responses.

15

Market commonality
– number of markets with which a firm and a competitor are jointly involved.
– degree of importance of the individual markets to each competitor.

Firms competing against one another in several or many markets engage in
multimarket competition.

A firm with greater multimarket contact is less likely to initiate an attack, but more
likely to more respond aggressively when attacked.

16

Resource similarity
– how comparable the firm’s tangible and intangible resources are to a

competitor’s in terms of both types and amounts.

Firms with similar types and amounts of resources are likely to have similar
strengths and weaknesses and use similar strategies.

Assessing resource similarity is difficult if critical resources are intangible, rather
than tangible.

17 18

10/4/21

4

Example: systematic analysis of
market commonality

Product market

A B C D Sum

Focal company X X 2

Competitor A X X 2

Competitor B X X X 3

!!!
Same process may be used for Resource Similarity, on a separate
spreadsheet

19

Example: systematic analysis of
resource similarity

Resource or
capability

category→

A B C D Sum

Focal company X X 2

Competitor A X X 2

Competitor B X X X 3

!!!

20

Competitor
map

21

Drivers of competitive behavior

22

Drivers of competitive behavior

23

Drivers of competitive behavior

24

10/4/21

5

Drivers of competitive behavior

25

Drivers of competitive behavior

26

Rivalry
Competitive Action

A strategic or tactical action the firm takes to build or defend its competitive
advantages or improve its market position.

Competitive Response

A strategic or tactical action the firm takes to counter the effects of a competitor’s
competitive action.

27

Rivalry…
Strategic Action (or Response)

Market move designed to implement strategy and represents significant
commitments and distinctive resources. Difficult to implement and reverse

Ex: New product introduction, Acquisition, International expansion

Tactical Action (or Response)

Designed to fine-tune a strategy. Involves fewer and more general resources, are
easy to implement and reverse. Easier for competitors to respond to.

Ex: Price increases/decreases, some forms of advertising

28

These dimensions are
observable in the marketplace
and allow you to identify
competitive behavior

29

Common competitive tactics
– Pretend you don’t exist
– Copy your offering
– Trash, sue, undercut (hire talent away)
– Go toe to toe (improving customer experience)
– Leapfrog your offering (product/service is of much better quality)

30

10/4/21

6

Why imitation can
be a viable
competitive tactic?

● Not all firms intend to lead their
industry, just be profitable

● Following the leader in a profitable
industry carries far less development
costs and risks

● Good execution of someone else’s
idea could be more valuable than
the idea itself

31

Isomorphism. Or do all cars look the same?

Source: https://m edium .com /swlh/the-zom bie-m obile-b03932ac971d

32

33 34

In conclusion:

● Spot competitive industries based on life-cycle, profitability (ROIC), and
industry structure

● Analyze rivalry based on frequency, strength, velocity, and types of
competitive actions and responses

● Strategic competitor analysis based on market commonality and resource
similarity

● Isomorphism vs sustained advantage as legitimate competitive strategies

35

Strategic Management In Global Environments

 

Part 3: Company research

Goals

– Locate an existing public corporation that operates within the scope identified by your team and  analyze their position relative to external environment constraints, internal environment, and strategic  approach. 

Steps

– Select a publicly traded corporation that your team believes has potential within an industry as regards  the scope identified in Part 1. Firms who have underperformed relative to industry leaders or whose  potential appears unrealized are preferred. Consider firms you know little or nothing about, in order to  maximize your learning. Company selection is subject to instructor approval

o In exceptional circumstances, a private firm may be used, if a team is able to secure access to a  local firm who would benefit from a strategic analysis of their business and is willing to share  internal information (NDA required). 

– Explore the corporate website. How is it laid out? What are your first impressions of the company?  Where is the company headquartered? Write down their HQ address info. Become familiar with the  location of the important information you will be searching throughout your project (e.g., investor  relations and other sections). 

– Consult major databases available on campus along with high quality business publications to learn  about the company 

1. Identify the company’s mission, vision, goals, and relevant stakeholders and write them down. How  clear are their mission and vision? Are they well communicated? 

2. Become acquainted with the company’s products and services and draw up the company’s corporate  structure. How diversified are they?  

3. If a business unit, conduct a value chain analysis of the target company: 

4. Define the company’s strategic business units (if any) 

5. Identify the company’s critical value-creating activities 

6. Explore the international reach of the company. What is their global footprint? How many countries?  How much revenue do they derive from domestic vs. foreign markets? (see financials) 7. Identify the company’s executive officers and draw up the executive structure. 

8. Identify the company’s board of directors and learn about their background. How many directors on  the board? How many insiders/outsiders/related? Who holds the key functions on the board? Are  there any subcommittees overseen by the board? 

9. Scan their career opportunities page and summarize the types of jobs they offer. What fields are the  jobs in? Would you consider working with this company? 

10. Locate and download the most recent corporate reports (e.g., annual report). How are they laid out? 

 11. Search for and read about your target company, from other online business news sources: has the  company been in the news recently? Summarize the general issues about this company from the  news? 

12. Conduct a stakeholder analysis at the level of the issue/project, product, or organization (form  available on CC) 

13. Identify and define the industry where the company obtains most of their revenues from. Analyze the  dynamics of this industry and the company’s competitive position relative to the five forces. What are  the industry’s driving forces and what is their impact?

© Cata Ratiu, 2022 4 

14. Identify and define the company’s major growth industry/ies. Analyze the company’s competitive  position in the industry/ies relative to the five forces. 

15. Conduct a financial performance analysis: 

– Read the most recent annual report of your assigned company and conduct financial ratios and  statement analyses: 

– Choose the appropriate ratios to analyze 

– Locate the appropriate sources to provide the raw data with which to calculate the ratios – Calculate the ratios and compare them; use multiple years as appropriate, check for opportunities  and problems 

16. Conduct a non-financial performance analysis 

– Collect and compile data regarding other measures of company performance from corporate  documents, databases, and other business sources.  

– Analyze non-financial measures, as pertinent to your company (for more information, see the  “Performance” chapter posted on CC). 

17. Conduct a core competency analysis. Using the value chain analysis, list the company’s major capability  areas. Specify if the company holds any core competencies or the potential to develop in the future.  Does the company have any core rigidities? How can the company restructure its capability portfolio to  address pressing issues you have identified? 

What to prepare 

A written report which addresses the topics outlined in the steps above. If you are unable to find useful  information for any area, explain your methods and efforts. Any worksheets used may be appended to your  report. You may use this time to prepare data visualizations to be used in the final report (i.e., tables, figures,  etc.). Also provide a list of references for all information found (APA format), with proper referencing and  citations in the text of your report. Any tables, figures, or other exhibits should contain information about the  source of the data. There is no page limit.

Strategic Management in Global Environments

10/4/21

1

Strategic
alliances
E X T E R N A L R E S O U R C E
A C Q U I S I T I O N

1

3 main expansion modes

Internal
development

Strategic
alliances

Mergers and
acquisitions

2

What is a
strategic
alliance

An arrangement concerning the joint coordination of
skills and resources between two or more firms
related to a business operation or project

Requires cooperative behavior from all partners

Included: joint ventures, licensing, co-development, or
co-marketing agreements

Not included: arm’s-length supply arrangements,
overseas or local subsidiaries, mergers and
acquisitions

3

HP x Disney
Form ed when founders Hewlett and Packard shook hands
with founder Disney

During creation of Fantasia, Disney purchased audio
equipm ent from HP

Alliance continued. Disney relied heavily on HP developm ent
and IT for its own infrastructure

Current day Disney attractions: the Im agineering team still
attached to HP system s architecture.

During design and build of Disney’s M ission: SPACE, HP
engineers and Disney creatives worked side-by-side to
develop the m ost technologically advanced ride

4

Structure:

Renault owns 43.4% stake in Nissan (voting)

Nissan holds 15% stake in Renault (non-
voting)

Carlos Ghosn was the founding
chairman/CEO of the Alliance → 2018
(Brazilian/Lebanese/French)

Goal: Economies of scale without merging
corporate identities of partners

Formerly the Renault-Nissan Alliance (1999–2017)

Automakers sell 1/9 vehicles worldwide

Leading plug-in electric vehicle manufacturer

Structured as cross-sharing agreement

Unique to the auto industry compared to the
more typical consolidation trends

https://www.alliance-2022.com

5

Why do these alliances exist?

This type of alliance is a consortium of companies that provides memberships with benefits

6

10/4/21

2

Airline alliance and efficiency

Source: HokeyMin & Seong-JongJoo, 2015

7

Efficiency
scores of
major
alliances

Source: HokeyMin & Seong-JongJoo, 2015

8

Types of
strategic
alliances, by
legal
structure

Joint Venture

– Two or more firms create a legally
independent company by sharing some
of their resources and capabilities.

Equity Strategic Alliance

– Partners purchase non-controlling
equity interests (i.e., swap shares)

Non-equity Strategic Alliance

– Two or more firms develop a contractual
relationship to share some of their
unique resources and capabilities.

9

From the news

Subaru officially joins Toyota Group (2020)

● Toyota increased stake in Subaru Corp from 16.83% to 20%

● Subaru not absorbed into Toyota M otor as subsidiary
● Expected changes:

○ Subaru to use Toyota Hybrid and EV tech

○ Maybe better AWD in Toyotas

10

From the News: TikTok / Oracle /
Walmart

August/Septem ber 2020:

● Oracle/Walm art to partner for ByteDance in the US

● Provide back-end tech to TikTok, deals with security
concerns over US users’ data

● Oracle is an enterprise software giant, but not a
social m edia co.

Novem ber 2020:

● JV between ORCL, W M T, and US investors in
BDNCE to handle TikTok in US.

● Deal requires approval by US govt

11

Typology:
by
strategic
intent
Business
level

12

10/4/21

3

What are some
risks of alliances?

13

Risks with
strategic
alliances

Partners may act opportunistically

Partners may misrepresent
competencies brought to the partnership

Partners fail to make committed
resources and capabilities available to
other partners

One partner may make investments that
are specific to the alliance while its
partner does not

14

Forms of alliances by transaction type

Source: Peter Pekar Jr., Marc Margulis, Marc Margulis, 2003

15

Alliance vs
acquisitions

Executives do not always see alliance and acquisitions

as distinct m odes of achieving growth

M any consider the two as interchangeable strategies

In som e cases (Disney/Pixar), alliances lead to
acquisitions

16

Alliances vs acquisitions – success rates

17

Strategic Management in Global Environments

4/11/22, 7:22 AMWarren Buffett’s Protégé Is Building a Mini Berkshire – WSJ

Page 1 of 6https://www.wsj.com/articles/warren-buffetts-protege-is-building-a-mini-berkshire-11649496605

Tracy Britt Cool spent a decade working for Warren Buffett. She now
wants to buy the kinds of companies that might have interested the
famed investor 30 or 40 years ago.

Those are businesses typically run by founders or family owners that
have solid performance and competitive “moats”—a favorite term of
Mr. Buffett’s—yet aren’t big enough to draw Berkshire Hathaway Inc.’s

This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit
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https://www.wsj.com/articles/warren-bu!etts-protege-is-building-a-mini-berkshire-11649496605

BUSINESS | MANAGEMENT | MANAGEMENT & CAREERS

Warren Buffett’s Protégé Is Building a Mini
Berkshire
Like her mentor, Tracy Britt Cool looks for founder-run companies with ‘moats,’ but she doesn’t share

his hands-o!-approach

Tracy Britt Cool co-founded an investment firm, Kanbrick, that aims to buy
one or two businesses a year and hold them for the long term.
PHOTO: KANBRICK

By Chip Cutter Follow

Updated April 9, 2022 12:32 pm ET

https://adclick.g.doubleclick.net/pcs/click?xai=AKAOjsug6GeTOcfe5cLWR1EbCz7z9P9jFc5AVYVUHZd-tiJYD4bbw9FwNGnhPj-0dB7XPaaRdEQvde4dHkv_9V1i4r5U5sY0LX7G5GXBkOYhv6T17ZjiFS1vpcKnushZOI321FkEJ0N8_GCBuXd7GgDAmYsS0vkdKG6VKQgdq_BRnFHVXnD4KaAh9c_ZGmsYsV6jxooT9vh7tEvYO4jxIUmRkP7SNU4-QUl5L_oopyNsZ-xBBDwaAzrpPzB4bKkhje3jE8vWOrZETJOlSiBnJlVllI8Y5Wm7igGcYSz3PavuQrCW5hm9i2w4k6QCIRnZpbPk1lVVVH7zYLoo7nZNvD5MOg3YrkrL5PM_upD8pv2Ba-V8qCTTyt8&sai=AMfl-YTZFuNo9VYfZu7W82q0zgN0vH_vkxDYzAVWq-VsrPBT4SdQn2pNszUfLune47olzzE7qgRylRwHq76S_2xX5YPPYxeF6D1KoRoUUOr2y0wGzNF3TadPMSeqx-Ol0JQ_SA&sig=Cg0ArKJSzJU1cGKti783&fbs_aeid=%5Bgw_fbsaeid%5D&urlfix=1&adurl=https://stags.bluekai.com/site/89733?phint=event%253Dclick&phint=aid%253D3573281&phint=pid%253D311084354&phint=cid%253D26275556&phint=crid%253D163669136&done=https://www.oracle.com/customers/ttx-oracle-cloud/?source=:ad:dd:ws:eng:a_nas:dcm-311084354-504018856-163669136:RC_WWMK210730P00003:NA22_GEN_OR_CP150_M0601_SP048YP02_DP1474_AP03_RO003&SC=:ad:dd:ws:eng:a_nas:dcm-311084354-504018856-163669136:RC_WWMK210730P00003:NA22_GEN_OR_CP150_M0601_SP048YP02_DP1474_AP03_RO003&dclid=%25edclid!

4/11/22, 7:22 AMWarren Buffett’s Protégé Is Building a Mini Berkshire – WSJ

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attention today.

“Berkshire needs multibillion-dollar acquisitions to move the needle,”
Ms. Cool says. “So many of the people who contact us or reach out
would want to sell to Berkshire, but they’re just too small.”

Ms. Cool launched an investment firm with a former colleague in 2020,
called Kanbrick, that aims to focus on such companies. It has so far
acquired Thirty-One Gifts, a Columbus, Ohio, company that sells tote
bags, backpacks and other items through independent consultants.
Kanbrick is working on investments with a home-services company and
consumer brands.

Picking the right spots takes time. Before buying a business, Ms. Cool
said she and her team will typically sit down with founders and aim to
understand not only the fundamentals of the business, but the people
working there and the strategy, hoping to answer: “What might be the
challenge here, what might be the opportunity?” she said.

To get to know founders, Kanbrick also runs a three-month program for
midsize companies that provides coaching and other support; so far,
Ms. Cool and her colleagues have worked with 15 companies, including
a large Arizona farm that sells cantaloupe and honeydew melons to big-
box retailers.

The 37-year-old Ms. Cool
grew up on a family farm in
Kansas that shipped
produce across the
Midwest. She attended
Harvard Business School
and joined Berkshire in
2009 at age 25, initially
working as Mr. Buffett’s
financial assistant.

She later became chief executive of a cookware company owned by
Berkshire, Pampered Chef, and along the way took on assignments
within Berkshire helping struggling companies. She served as the
chairman of Berkshire companies such as Benjamin Moore & Co. and
Johns Manville, and sat on the board of Kraft Heinz Co. and others.

In an interview in 2019, Mr. Buffett called Ms. Cool “the fireman,”
capable of helping to revive companies and of taking on any

4/11/22, 7:22 AMWarren Buffett’s Protégé Is Building a Mini Berkshire – WSJ

Page 3 of 6https://www.wsj.com/articles/warren-buffetts-protege-is-building-a-mini-berkshire-11649496605

assignment.

Ms. Cool recently spoke with The Wall Street Journal from her home
office in Nashville, Tenn. Here are edited excerpts:

WSJ: What was it that made you say there’s a need for this model?

Ms. Cool: Over the years, I’ve talked to a lot of founders and owners,
some of whom would come to Berkshire and want to sell their
companies; other people I met through organizations. What I found is
that most midsize companies struggle with the same things: how to
hire the right people, how to develop them, how to incentivize them,
how to help them to grow, how to build a strategy. So what we did is we
built a business system to help in those areas, and that really allowed us
to create value with companies.

A lot of families and founders don’t want to sell to traditional private
equity. They don’t want to see their business bought and sold or
chopped up or their employees fired. We could provide them a longer-
term home, and help them build in the right way.

WSJ: What sorts of companies are you focusing on?

Ms. Cool: We want businesses that are going to be around and
successful and strong, and have some sort of moat allowing them to
have above-average returns on capital. Smaller businesses that are $10
[million] to $50 million in [earnings before interest and taxes] are sort
of our sweet spot in size. They’re beyond the new-growth phase, but
they’re not quite very large businesses.

They tend to be family businesses, founder-owned businesses. We have

Ms. Cool, who spent a decade at Berkshire Hathaway, at the conglomerate’s
2014 shareholder meeting in Omaha, Neb.
PHOTO: DANIEL ACKER/BLOOMBERG NEWS

4/11/22, 7:22 AMWarren Buffett’s Protégé Is Building a Mini Berkshire – WSJ

Page 4 of 6https://www.wsj.com/articles/warren-buffetts-protege-is-building-a-mini-berkshire-11649496605

a lot of conversations with families, founders who want a partner, who
want a longer-term home, but don’t really think that maybe a strategic
or private-equity firm is the right fit for them.

WSJ: How does your approach differ from private equity?

Ms. Cool: One is just how long we hold companies. Most private-equity
firms own businesses for three or four years. If you’re going to own a
company three or four years, the minute you buy it, you’re thinking
about selling it, and every decision you’re making is focused on: What
am I going to do to sell this business? A lot of investments you make in
businesses don’t pay off in three to four years, and so I think having that
longer-term horizon is super valuable.

Most people in private equity typically [have] financial backgrounds.
Both my partner and I started our careers as investors but thought it
was very important to go get operating experience.

I became the CEO of Pampered Chef, he became the CFO, really with
that goal of: How do we actually become better at what we do? And I
think having that operating experience helps us make better decisions,
understand what’s possible in a business, what’s needed. And then we
can relate with a founder or owner or CEO because we’ve been in their
shoes and we know businesses aren’t run on spreadsheets and
PowerPoints, right?

WSJ: So how do you pick your spots—and what industries are you
avoiding?

Ms. Cool: There are some
places that we don’t play. We
don’t play in real estate. We
don’t play in financials. We
don’t play in biotech. There’s
just spaces where we don’t
have the expertise, the
insight, and we’re not going to
be better than someone else.
Then there’s other industries
where you’ve had a lot more
experience and things are
interesting. And so those
broad industries are

consumer, industrial, business services, but within those there’s

‘A lot of families and
founders don’t want to
sell to traditional
private equity. They
don’t want to see their
business bought and
sold or chopped up or
their employees fired.’
— Tracy Britt Cool, co-founder of Kanbrick

4/11/22, 7:22 AMWarren Buffett’s Protégé Is Building a Mini Berkshire – WSJ

Page 5 of 6https://www.wsj.com/articles/warren-buffetts-protege-is-building-a-mini-berkshire-11649496605

hundreds of subsectors.

So we spend time looking at a lot of different ones and really saying: Do
we think that this is a really great business? Do we think that it’s going
to continue for 10, 15, 20 years and not be disrupted by someone else or
by technology? And then, third, is it a space where we can add some
valuable insights or perspective?

WSJ: You’re focusing on midsize companies. How do the challenges
these companies face differ from what larger companies are
experiencing?

Ms. Cool: People and culture is always—in my view—the number one
issue that any company has.

How do we attract really great talent to my company? Perhaps I am
based in a rural part of Minnesota or Missouri or something like that.
How do I help people understand why they want to join my business
that they’ve never heard of? Everyone’s heard of P&G, Coca-Cola.
People haven’t heard of most midsize companies. Then, once I have
them in the organization, how do I develop them? Because it’s not like
I’ve got, you know, hundreds of thousands of jobs; I’ve got probably a
couple hundred jobs. And so I need to get the right people, but show
them a career path.

WSJ: What’s the long-term plan for Kanbrick? Do you want to go
public?

Ms. Cool: We don’t have a specific outcome in terms of what we want to
achieve via go public or otherwise. It really is: How do we build it in the
right way? And then how do we add value to the companies, to our
team, to our investors, and help support everyone in doing that?

WSJ: How have you funded Kanbrick?

Ms. Cool: It’s a combination of our capital, and then we have a select
group of investors, endowments and family offices that are partners.

WSJ: It appears there are a lot of similarities between Kanbrick and
Berkshire—a long-term focus, moats, you even wrote an annual letter
last year like Mr. Buffett. How does it differ?

Ms. Cool: Berkshire is very successful, so being similar to Berkshire is a
good thing by and large, in my mind. I’d say we differ on two
dimensions. The biggest is size. We can focus on much smaller
businesses that are just too small for Berkshire. That’s where I think the

4/11/22, 7:22 AMWarren Buffett’s Protégé Is Building a Mini Berkshire – WSJ

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biggest opportunity is and why ultimately I left to start Kanbrick. The
second differentiator is we’re more hands on. Berkshire famously is
very hands off.

WSJ: Did Mr. Buffett give any advice that sticks with you as you’re
building this firm?

Ms. Cool: It’s hard to distill it down because there’s so many lessons
from my time at Berkshire and working closely with Warren over 10
years. I think just the power of long term, the power of finding high-
quality businesses and the power of partnering with high-quality
people. When those three things are done in the right way, you can
build something really amazing.

Write to Chip Cutter at chip.cutter@wsj.com

Appeared in the April 11, 2022, print edition as ‘Buffett Protégé Builds a Mini Berkshire.’

Copyright © 2022 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit
https://www.djreprints.com.

Strategic Management in Global Environments

10/4/21

1

Mergers &
Acquisitions

1

– Financial transactions aimed at controlling undervalued assets

– Target industry is very different from acquirer core business

– Primary objective: provide only enough cash flow for debt repayment

– Sell non-core assets, or most parts of the business, even liquidate the company
– Corporate raider = a financier who makes a practice of making hostile takeover

bids for companies, either to control their policies or to resell them for a profit

– Known to use junk bonds to finance transactions

– Long term: bankruptcies, legal issues, scaled back operations

Read more: http://www.nytimes.com/1996/06/30/business/where-oh-where-have-all-the-corporate-raiders-gone.html

M&A in the 1980s

2

Yes, corporate level tool (what businesses
should the firm be in?)

Used to redefine competitive scope, when
other alternatives are not feasible

Expand (diversify) or contract (divest)

“If you can’t build it, buy it”

Also, No, they can be speculative

Strategic?

3

_________________________

*value of most deals is undisclosed

M&A as GROWTH engine

Alphabet 220, 2001–present, > $30b*

Apple 99, 1988–present, >$11b*

Facebook 70, 2005–present, > $24b*

Qualcomm 43, 1997– 2017

M&A as EXIT strategy
Acquisitions represent potential exit
of founders or target company
owners

4

A+B=AB

Two companies join to form one
single (new) company

Equal size and stature

Name change is typical

In practice, friendly mergers are the
exception, not the rule

Merger

5

1998, Daimler-Benz + Chrysler = DaimlerChrysler, $36b

1998, Travelers Group + Citicorp = Citigroup Inc, $140b

1999, Exxon + Mobil = Exxon Mobil Corp, $81b

2000, AOL + Time Warner = AOL Time Warner, $165b

2000, Glaxo Wellcome PLC + SmithKline Beecham = GlaxoSmithKline plc, $75.7b

2005, Royal Dutch Petroleum + Dutch Shell Transport & Trading = Royal Dutch
Shell, $74.5b

(in)Famous mergers

6

10/4/21

2

A ≥ b = Ab

One firm buys another

Target ceases to exist
(becomes a subsidiary)

Typically larger business
buys smaller one

Acquisition

7

TAKEOVER: an acquisition where the target firm did not solicit the bid

Acquiring company often buys majority stake and becomes responsible for
operations, holdings and debt

When the target is a publicly traded company, the acquiring company makes an
offer for all of the target’s outstanding shares.

HOSTILE TAKEOVER: accomplished by going directly to the company’s
shareholders or fighting to replace management to get the acquisition approved

Acquisition

8

2000, Vodafone ≥ Mannesman, $181b

2001, Comcast ≥ AT&T Broadband, $72b

2003, Pfizer ≥ Pharmacia, $60b

2004, JP Morgan Chase ≥ Bank One, $58b

2006, AT&T ≥ BellSouth, $86b

2009, Pfizer ≥ Wyeth, $68b

2018, Bayer ≥ Monsanto, $63b

Largest known acquisitions

>$525,000,000,000

9

100+
acquisitions
Since 1998

10

11

A form of corporate restructuring, leads to consolidation

Two companies together > value than separate

Many firms have no option but to merge, acquire, or be acquired

Enable successful firms to grow faster than competition

Lead to extinction of weak companies

Among the most powerful and versatile growth tools

What are the typical sectors of M&A activity?

Why important?

12

10/4/21

3

US M&A deal value by sector
(2000–2015)

Source: IMAA

13

Also important
because you will likely
be involved in one, as employee,
founder, buyer, etc.

14

Increase market power / reduce competitive balance of industry / achieve
economies of scale

Reshape competitive scope / avoid excessive competition / reduce dependence
on too few markets / stabilize earnings and boost investor confidence / spread risk

Enter new markets / overcome entry barriers / speed to market

Adding product lines / avoid cost + risk of new product development

Reasons for M&A

15

Tax savings, when profitable co. merges with, or acquires a money-loser

Learn / develop new capabilities / competencies

Transform corporate identity / reputation

Increase distribution reach / cross-sell products or services

Reasons for M&A…

16

Conglomerate: unrelated businesses

Horizontal: target is in the same industry

Facebook ≥ Instagram (same industry, similar product stages)

Vertical: target is supplier/distributor

Live Nation + Ticketmaster (manage artists, produce shows, sell tix)

Market extension: same products, separate geographical markets

Product extension: related products, same market.

Group products → more consumers

Types of M&A

17

M&A Process

Image: Ritchie Hogg

18

10/4/21

4

Inadequate evaluation of target → ‘winner’s curse:’ acquirer overpays for target

Large debt of target → difficult to manage cash flows

Too large → managing bureaucracy reduces innovation and flexibility

Overly diversified → lack of expertise in managing unrelated business

Inability to achieve synergy → expected benefits are unrealized

Potential problems

19

What is the source of most
M&A problems?

Integration difficulties
Corporate culture

Technology

International issues

Morale & productivity

20

Financial analysis — review historical financial statements, projections, etc.

Technology/Intellectual property — extent and quality of assets (patents, etc.)

Customers/Sales — largest segments, concentration, sales pipeline

Strategic fit with acquiring firm — integration, complementarity, etc.

Employee/Management issues — quality of mgmt and employee base (bios, labor disputes, HR issues)

Litigation — pending, threatened, settled, arbitration, regulatory proceedings

Tax issues — carryforwards, etc.

Antitrust and regulatory issues

Insurance — key policies, general liability, intellectual property, health, etc.

Read more: https://www.forbes.com/sites/allbusiness/2014/12/19/20-key-due-diligence-activities-in-a-merger-and-acquisition-transaction/#338ee3f64bfc

M&A due diligence

21

Downsizing: wholesale reduction
of employees

Downscoping: selectively
divesting or closing non-core
business. Reduce scope of
operations. Leads to better focus.

Leverage Buyout: buy firm assets
in order to take firm private

Restructuring

22

Restructuring outcomes

Downsizing

Downscoping

Leveraged
buyout

Reduced labor
costs

Loss of human
capital

Lower
performance

Reduced debt
costs

Strategic
control

High debt costs

Higher
performance

Higher risk

23

How to keep your job after an acquisition?

Source: Javad Ahmad & Rajiv Ramanathan

24

10/4/21

5

Beer

25

Food & Convenience Goods

26

Auto

Source: The Economic Times Delhi, Jul 22, 2010, Page: 33

27

Defense

28

Banking

29

Airlines

30

10/4/21

6

Federal Trade Commission [FTC.GOV] regulates antitrust issues:

“Many mergers benefit competition and consumers by allowing firms to operate
more efficiently. But some mergers change market dynamics in ways that can lead
to higher prices, fewer or lower-quality goods or services, or less innovation.”

Oligopolies

Loss of competition

Loss of innovation

Loss of consumer value

Effects of Consolidation

31

Disruptors

Valued at >$1.75b

32

2013: $1.3 million
2016: $325,000 – $750,000

2017: $241,000
2019: <$200k

2020: debt restructuring req’d

Cost of NYC taxi medallion

33

2003
Most automakers invest nothing or minimally in electric
vehicles.

G.M. announces that it will not renew leases on its EV1 cars
saying it can no longer supply parts to repair the vehicles
and that it plans to reclaim the cars by the end of 2004.

Tesla founded.

2005
On February 16, electric vehicle enthusiasts begin a “Don’t
Crush” vigil to stop G.M. from demolishing 78 impounded
EV1s in Burbank, California. The vigil ends twenty-eight
days later when G.M. removes the cars from the facility. In
the film “Who Killed the Electric Car” G.M. spokesman Dave
Barthmuss states that the EV1s are to be recycled, not just
crushed.

2006
Tesla Motors publicly unveils the ultra-sporty Tesla
Roadster at the San Francisco International Auto Show in
November. The first production Roadsters will be sold in
2008 with a base price listing of $98,950.

2021
Most automakers have electric offerings and plan on shifting
fleets to mostly electric.

Electric car

34

Space

35

Business Broker: https://www.businessbroker.net/business-directory.aspx

Biz Sale (FSBO): http://www.bizsale.com/

BusinessesForSale: https://us.businessesforsale.com/

Fancy buying or selling a business?

36

10/4/21

7

M&A Magazine: https://www.themiddlemarket.com/

Follow along

37