COR BUSINESS STRATEGY IX CORP LEVEL

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COR BUSINESS STRATEGY IX CORP LEVEL Powered By Docstoc
					CORPORATE LEVEL
  STRATEGIES
     Cooperation
          REGIONALISATION
   The Myth of Globalisation
   The Triads of Asia, Europe & North America- intra-
    regional trade of the MNCs were mainly within their
    regions- 62% in EU, 56% in North America & 56%
    in Asia
   Regionalisation as a semi-globalisation – a step
    toward full globalisation
   Pankj Ghemawat says regionalism getting more
    important, a company with a regional strategy in
    conjunction with local &global thrust can boost its
    fortunes
      FIVE TYPES OF REGIONAL
            STRATEGIES
   Home base strategy -manufacturing hub at home
    exporting to neighbours
   Portfolio Strategies- manufacturing facilities in
    different regions
   Hub Strategies- a network of hubs regionally serving
    regional countries
   Platform Strategies- interregional platforms providing
    back room activities, delivering ecoomies of scale
    and scope
   Mandate Strategies- economies of specialisation
    through interregional mandates assigning specific
    products and roles to different regions
     BOTTOM OF THE PYRAMID
          STRATEGIES
   Asking for easy payments in installments from
    cellphones, TV to low cost homes
   Dramatic cost cutting such as medical services cost a
    small fraction of they do in the West
   Offering products in small packages- shampoo in
    sachets
   Charging prices by pay for use like in cyber cafes
   Direct distribution like ITC buys directly from
    farmers through e choupals
         LOCAL VS. GLOBAL
   Indian firms are increasingly adopting
    international and global strategies through
    exposure with Govt. policies also being
    impacted
   Domestic competition has changed its colour
    and intensified
   Indian Cos. are also realising the limitations of
    a domestic market
          LOCAL VS. GLOBAL
   Presence of diasporas have also helped this process of
    internationalisation
   Media hype about China & India has also helped
   The unleashing of the entrepreneurial spirit mong
    Indian companies have made them lokk beyond the
    borders of the country
   Emergence of Indian MNCs- A V Birla Group, Asian
    Pants, Oberois, is, Indian Hotels, auto-component
    industries, Zee Telefilms
COOPERATION STRATEGIES
   Mergers & Acquisitions ( or Takeovers)- two entities are
    involved initially but a merger becomes an acquisition when
    the objectives of the buyer firm match those of seller firms-
    generally mergers are a prelude to acquisition and the acquired
    firm may acquiesce in that
   Joint Ventures when a third independent ompany is formed by
    two companies- they flourish in this era of globalisation
   Strategic Alliances are partnerships where the strengths and
    core competencies are combined to pursue regional interests
   They are all means to several ends as integration,
    diversification and restructuring
    M & A STRATEGIES- REASONS
         FOR THE BUYERS
   To increase the value of the Company's stok
   To increase growth rate
   To stabilise earnings and sales
   To balance, complete and diversify its product
    lines
   To reduce competition
   To acquire a needed resource, tax concessions,
    synergy
              ISSUES IN M & A
   Strategic Issues: to what extent this merger will lead
    to real synergy- we need to study the strategic
    advantages and distinctive competencies of the two
    firms, study the match between he objectives of the
    two firms
   Three Financial Issues- valuation of the target firm’s
    business and shares, sources of funds, could be the
    acquiring company’s funds, GDRs, loans fom local
    financial institutions, taxation matters
    M & A STRATEGIES- REASONS
           FOR SELLERS
   To increase the value of the owner’s stock and
    investment
   To increase the growth rate
   To get resources to stabilise operations
   To avail themselves of tax concessions
   To deal with top management succession
    problems
              ISSUES IN M & A
   Managerial Issues- cultural issues, career
    uncertainties of the managers of the firm taken over-
    how the HR issues are handled
   Legal Issues- various acts are to be complied with
   How to manage an M & A?- spell out the objectives,
    how they are going to be achieved, assess managerial
    quality, check the compatibility of the businesses, HR
    issues to be anticipated
   Hostile Takeovers-shares picked from the open
    market and controlling interests are obtained- the
    majority of the shareholders will be inluened by the
    brand name and reputation of the acquiring company
      PROS & CONS OF M & A
   One school believes that it helps businesses become
    more dynamic through greater market shares,
    consolidation of once rival companies decrease
    competition
   Takeovers in India – some of them controversial –is a
    viable alternative for firms looking for external
    expansion
   Where the objectives are to consolidate capacities,
    help diversification, create synergy a takeover is a
    welcoe development

				
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posted:7/28/2012
language:English
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