《企業(yè)戰(zhàn)略識》課件

Chapter5StrategicGeneration,Evaluation,andSelection

1Chapter5StrategicGeneration,ChapterOutlineMichaelPorter’sGenericStrategiesTypesofStrategiesIntegrationStrategies2ChapterOutlineMichaelPorter’ChapterOutline(cont’d)IntensiveStrategiesDiversificationStrategiesDefensiveStrategies3ChapterOutline(cont’d)IntensCorporateLevel--Concentrationstrategy

Afirmdirectsitsresourcestotheprofitablegrowthofasingleproduct,inasinglemarket,withasingledominanttechnologyThefirmthoroughlydevelopsandexploitsitsexpertiseinadelimitedcompetitivearena4CorporateLevel--ConcentrationCorporateLevel--ConcentrationstrategyConcentratedgrowthstrategiesleadtoenhancedperformance.Theabilitytoassessmarketneeds,knowledgeofbuyerbehavior,customerpricesensitivityandeffectivenessofpromotionConcentratingintheproduct-marketsegmentitknowsbestGrowththatresultsfromincreasedproductivity,bettercoverageofitsactualproduct-marketsegment,andmoreefficientuseofitstechnology5CorporateLevel--ConcentratioRiskandrewardsofconcentratedgrowthUnderstableconditions,concentratedgrowthposeslowerriskthananyothergrandstrategy,butinachangingenvironment,afirmcommittedtoconcentratedgrowthfaceshighrisksasingleproductmarketmakesafirmparticularlyvulnerabletochangesinthatsegmentHighopportunitycoststhatresultfromremaininginaspecificmarketandignoringotheroptionsthatcouldemploythefirm’sresourcesmoreprofitable6RiskandrewardsofconcentratCorporateLevel–IntegrationStrategies

Vertical

Integration

Strategies

Forward

IntegrationBackward

Integration

Horizontal

Integration

7CorporateLevel–IntegrationSIntegrationStrategiesGainControlOver--DistributorsSuppliersCompetitors8IntegrationStrategiesGainConForwardIntegrationStrategiesGainControlOver--DistributorsRetailersgainingownershiporincreasedcontroloverdistributorsorretailers

9ForwardIntegrationStrategiesForwardIntegrationStrategiesGuidelines--Currentdistributors–expensiveorunreliableAvailabilityofqualitydistributors–limitedFirmcompetinginindustryexpectedtogrowmarkedlyFirmhasbothcapital&HRtomanagenewbusinessofdistributionCurrentdistributorshavehighprofitmargins10ForwardIntegrationStrategiesBackwardIntegrationStrategiesOwnershiporControl--Firm’ssuppliersBackwardintegrationisastrategyofseekingownershiporincreasedcontrolofafirm’ssuppliers.Thisstrategycanbeespeciallyappropriatewhenafirm’scurrentsuppliersareunreliable,toocostly,orcannotmeetthefirm’sneeds11BackwardIntegrationStrategieBackwardIntegrationStrategiesGuidelines--Currentsuppliers–expensiveorunreliableThenumberofsuppliersissmall;ThenumberofcompetitorsislargeHighgrowthinindustrysectorFirmhasbothcapital&HRtomanagenewbusinessStableprices(rawmaterials&products)areimportantCurrentsuppliershavehighprofitmargins12BackwardIntegrationStrategieHorizontalIntegrationStrategiesOwnershiporControl--

Firm’scompetitorsHorizontalintegrationreferstoastrategyofseekingownershipoforincreasedcontroloverafirm’scompetitors.TheincreaseduseofhorizontalintegrationasagrowthstrategyMergers,acquisitions,andtakeoversamongcompetitorsallowforincreasedeconomiesofscaleandenhancedtransferofresourcesandcompetencies13HorizontalIntegrationStrategHorizontalIntegrationStrategiesGuidelines--GainmonopolisticcharacteristicsCompetesingrowingindustryIncreasedeconomiesofscale–majorcompetitiveadvantagesFalteringduetolackofmanagerialexpertiseorneedforparticularresource14HorizontalIntegrationStrategDiversificationStrategiesLessPopular--MoredifficulttomanagediversebusinessactivitiesHowever--Thegreatestriskofbeinginasingleindustryishavingallyoureggsinonebasket15DiversificationStrategiesLessTypesofStrategies

Diversification

Strategies

Concentric

DiversificationConglomerate

DiversificationHorizontal

Diversification16TypesofStrategies

DiversificDiversificationStrategiesLessPopular--Moredifficulttomanagediversebusinessactivities17DiversificationStrategiesLessConcentricDiversificationStrategiesAddition--New&relatedproducts/servicesDellcomputerpursedconcentricdiversificationbymanufacturingandmarketingconsumerelectronicsproductssuchasflat-paneltelevisionsandMP3players18ConcentricDiversificationStrConcentricDiversificationStrategiesGuidelines--Competeinno/slowgrowthindustryNew&relatedproductsincreasessalesofcurrentproductsNew&relatedproductsofferedatcompetitivepricesCurrentproducts—declinestageofproductlifecycleStrongmanagementteam19ConcentricDiversificationStrHorizontalDiversificationStrategiesAddition--New&unrelatedproducts/servicesforcurrentcustomersNotasriskyasconglomeratediversificationbecauseafirmalreadyshouldbefamiliarwithitspresentcustomersHospitalscreateminiaturemallsbyofferingbanks,bookstores,coffeeshops,restaurants,andotherretailstoreswithintheirbuildings20HorizontalDiversificationStrHorizontalDiversificationStrategiesGuidelines--Addingnewproducts/serviceswouldsignificantlyincreaserevenuesHighlycompetitiveand/orno-growthindustry;lowmargins&returnsCurrentdistributionchannelscanbeusedNewproductshavecountercyclicalsalespatterns21HorizontalDiversificationStrConglomerateDiversificationStrategiesAddition--New&unrelatedproducts/servicesBatterycompanyEnergizerHoldings,acquiredtheSchick-WilkinsonSwordrazorbusiness—thesecondlargestshavingproductscompanywith18%globalmarketshareinthewet-shavingbusiness22ConglomerateDiversificationSConglomerateDiversificationStrategiesGuidelines--Decliningannualsales&profitsCapital&managerialabilitytocompeteinnewindustryFinancialsynergybetweenacquiredandacquiringfirmsCurrentmarketsforpresentproducts-saturated23ConglomerateDiversificationSMergers&Acquisitions

Amerger

inbusinessoreconomicsreferstothecombinationoftwocompaniesintoonelargercompany.Suchactionsarecommonlyvoluntaryandofteninvolvestockswap.Inmanyinstancesamergerresemblesatakeover

Acquisitions:Acorporateactioninwhichacompany

buys

most,ifnotall,of

thetargetcompany'sownershipstakesinordertoassumecontrolofthetargetfirm.

Atakeover

istechnicallythesameasanacquisition,butthetermisoftentakentomeanthattheapproachofthelargeracquiringcompanyisunwelcomefromthepointofviewofthesmallertargetcompany24Mergers&Acquisitions

AmergeMergers&Acquisitions

ProvideimprovedcapacityutilizationBetteruseofexistingsalesforceReducemanagerialstaffGaineconomiesofscaleSmoothoutseasonaltrendsinsalesGainnewtechnologyAccesstonewsuppliers,distributors,customers,products,creditors25Mergers&Acquisitions

ProvideRisksforM&AsNotall

M&AsareeffectiveandsuccessfulAbouthalfofmergersproducednegativereturnstoshareholders--byBusinessWeekandtheWallstreetJournal’sstudyToo-highpurchasepriceforthestockofanexcellentcompanycanundotheeffectsofasubsequentdecadeoffavorablebusinessdevelopment--WarrenBuffett

26RisksforM&AsNotallM&AsReasonswhyMergersandAcquisitionsFailIntegrationdifficultiesInadequateevaluationoftargetLargeorextraordinarydebtInabilitytoachievesynergyToomuchdiversificationManagersoverlyfocusedonacquisitionToolargeanacquisition27ReasonswhyMergersandAcquisReasonswhyMergersandAcquisitionsFailDifficulttointegratedifferentorganizationalculturesReducedemployeemoralduetolayoffsandrelocationsM&Ascanyieldgreatbenefits,butthepriceandreasoningmustberight28ReasonswhyMergersandAcquisCO-OPETITIONGametheory:Abranchofappliedmathematicsthatprovidesasystematicwaytodevelopstrategieswhenoneperson'sfortunedependsonwhatotherpeopledo29CO-OPETITIONGametheory:AbraCO-OPETITION

CO-OPETITIONisanewwayofthinkingaboutbusiness.Somepeopleseebusinessentirelyascompetition.Theythinkdoingbusinessiswagingwarandassumetheycan'twinunlesssomebodyelseloses.Otherpeopleseebusinessentirelyasco-operation-teamsandpartnerships.Butbusinessisbothco-operationandcompetition30CO-OPETITIONCO-OPETITIONisaCO-OPETITIONStrategicAllianceisaformalrelationshipbetweentwoormorepartiestopursueasetofagreedupongoalsortomeetacriticalbusinessneedwhileremainingindependentorganizations31CO-OPETITIONStrategicAllianceCO-OPETITIONPartnersmayprovidethestrategicalliancewithresourcessuchasproducts,distributionchannels,manufacturingcapability,projectfunding,capitalequipment,knowledge,expertise,orintellectualproperty.Theallianceisacooperationorcollaborationwhichaimsforasynergywhereeachpartnerhopesthatthebenefitsfromthealliancewillbegreaterthanthosefromindividualefforts.Theallianceofteninvolvestechnologytransfer(accesstoknowledgeandexpertise)sharedexpensesandsharedrisk.32CO-OPETITIONPartnersmayproviCO-OPETITIONEquitystrategicallianceisanallianceinwhichtwoormorefirmsowndifferentpercentagesofthecompanytheyhaveformedbycombiningsomeoftheirresourcesandcapabilitiestocreateacompetitiveadvantage.Nonequitystrategicallianceisanallianceinwhichtwoormorefirmsdevelopacontractual-relationshiptosharesomeoftheiruniqueresourcesandcapabilitiestocreateacompetitiveadvantage33CO-OPETITIONEquitystrategicaCO-OPETITIONJointventureisastrategicallianceinwhichtwoormorefirmscreatealegallyindependentcompanytosharesomeoftheirresourcesandcapabilitiestodevelopacompetitiveadvantageIncreasinglyglobalizationinmanyindustrymayrequiregreaterconsiderationofthejointventureapproach,ifthehistoricalnationalfirmsaretoremainviable,Jointownershiphasbecomeincreasinglyappealingfordomesticfirmstojoinforeignfirms34CO-OPETITIONJointventureisaCO-OPETITIONJointventurespresentopportunitieswithrisksLimitingdiscretion,control,andprofitpotentialofpartners35CO-OPETITIONJointventurespreCorporatelevel--Strategies

Defensive

Strategies

RetrenchmentDivestitureLiquidation36Corporatelevel--Strategies

DRetrenchmentStrategiesRegrouping--Cost&assetreductiontoreversedecliningsales&profit37RetrenchmentStrategiesRegroupDivestitureStrategiesSellingadivisionorpartofanorganization38DivestitureStrategiesSellingLiquidationStrategiesCompany’sassets,inparts,fortheirtangibleworthSelling39LiquidationStrategiesCompany’LiquidationStrategiesGuidelines--Retrenchment&divestiturefailedOnlyalternativeisbankruptcyMinimizestockholderlossbysellingfirm’sassets40LiquidationStrategiesGuidelinGenericStrategiesAccordingtoMichaelPorter,strategiesalloworganizationstogaincompetitiveadvantagefromthreedifferentbases:costleadership,differentiation,andfocus.Sohecallsthesebasesgenericstrategy41GenericStrategiesAccordingtoGenericStrategiesLowercostDifferentiation/premiumpriceCostLeadershipDifferentiationFocusBroadNarrowScopeAdaptedfromPorter1985Stuckinthemiddle42GenericStrategiesLowercostDiCostleadershipCostleadership:beingthelowestcostproducerofaproductorservicetoearnaboveaverageprofits43CostleadershipCostleadershipCostLeadershipWaysofensuringtotalcostsacrossvaluechainarelowerthancompetitors’totalcostsPerformvaluechainactivitiesmoreefficientlythanrivalsandcontrolfactorsthatdrivecostsRevampthefirm’soverallvaluechaintoeliminateorbypasssomecost-producingactivities44CostLeadershipWaysofensurinCostLeadershipThewaytopursuecostleadershipsuccessfullycopyingratherthanoriginatingdesignsusingcheapermaterialsandotherresourcesproducingproductswithno“frills”reducinglabourcostsandincreasinglabourproductivityachievingeconomiesofscalehighvolumesalesbyadvertisingandpromotion,investmentinmoderntechnologyusinghighvolumepurchasingtoobtaindiscountsforbulkbuyinglocatingactivitieswherecostsareloworgovernmenthelpisavailableobtaining'learningcurve'economies45CostLeadershipThewaytopursCostLeadershipCanbeespeciallyeffectivewhen:Themarketiscomposedofmanyprice-sensitivebuyersandthepricecompetitionamongrivalsisvigorousRival’sproductsareidenticalandsuppliesarereadilyavailableTherearefewwaystoachievedifferentiationMostbuyersusetheproductinthesamewayBuyershavelowswitchingcostsBuyersarelargeandhavesignificantpowerIndustrynewcomersuselowpricestoattractbuyersE46CostLeadershipCanbeespecialDifferentiationCreatingacustomerperceptionthataproductorserviceissuperiorsothatapremiumpricecanbecharged47DifferentiationCreatingacustDifferentiationThewaytopursuedifferentiationsuccessfullycreatingproductswhicharesuperiortocompetitorsbyvirtueofdesign,technology,performanceetcofferingsuperioraftersalesservicesuperiordistributionchannelscreatingastrongbrandnamethroughdesign,innovation,advertising,andsoonbyproductpackaging48DifferentiationThewaytopursDifferentiationCanbeespeciallyeffectivewhen:Therearemanywaystodifferentiateandmanybuyers,whoareprice-insensitiveperceive,andconsiderthevalueofthedifferencesBuyerneedsandusesarediverseFewrivalfirmsarefollowingasimilardifferentiationapproachTechnologychangeisfastpacedandcompetitionrevolvesaroundevolvingproductfeatures49DifferentiationCanbeespecialFocusedStrategiesConcernedwiththescopeofthestrategy，usedifferentiationorcostleadershipinnarrowscope–segmentorniche50FocusedStrategiesConcernedwiFocusedStrategy

Canbeespeciallyeffectivewhen:Thetargetmarketnicheislarge,profitable,andgrowingIndustryleadersdonotconsiderthenichecrucialIndustryleadersconsiderthenichetoocostlyordifficulttomeetTheindustryhasmanydifferentnichesandsegmentsFew,ifany,otherrivalsareattemptingtospecializeinthesametargetsegmentE51FocusedStrategyCanbeespeciAfirmthatengagesineachgenericstrategybutfailstoachieveanyofthemis“stuckinthemiddle”.ItpossessesnocompetitiveadvantageAfirmthatisstuckinthemiddlewillbemuchlessprofitablethanrivalsachievingoneofthegenericstrategiesAchievingcostleadershipanddifferentiationareusuallyinconsistent,differentiationisusuallycostly,conversely,costleadershipoftenrequiresafirmtoforegosomedifferentiationbystandardizingitsproducts,reducingmarketingoverhead,andthelikeUsuallyafirmmustmakeachoiceamongthem,oritwillbecomestuckinthemiddleStuckinthemiddle52AfirmthatengagesineachgeCriticismsofPorter

successfulfirmscanbestuckinthemiddle(e.g.Toyota,Tesco)lowcostdoesnotsellproducts(lowpricemay)differentiationmaybeusedtoincreasesalesratherthanchargingapremiumpricepricemaybeusedtodifferentiate（butonlyaveryfewofleadingfirmsinanindustrycouldbethecostleadership）53CriticismsofPorter

successfuHybridstrategyDegreeofpricesensitivityPriceinsensitivePricesensitivePrice/costbasedstrategyDifferentiationstrategyHybridstrategy54HybridstrategyDegreeofpriceValuechainandgenericstrategy

ValuechainactivityDifferentiationCostleadershipInboundlogisticsQualityofmaterialsCostcontrolOperationsControlqualityofoutputLowerproductioncostsandhighvolumeMarketingSales-qualityserviceHighvolume–advertisingOutboundlogisticsEfficientdistributionLowdistributioncostsServiceHighqualityserviceMinimalserviceFirminfrastructureEmphasisonqualityEmphasisonefficiencyHRdevelopmentTrainingtoimprovequalityTrainingtoreducecostsTechnologydevelopmentDevelopingnewandimprovedproductsReducingproductioncostsProcurementHighqualityresourcesLowcostresources55ValuechainandgenericstratePresentProducts目前產(chǎn)品NewProducts新產(chǎn)品PresentMarkets當(dāng)前市場

Newmarkets

新市場MarketPenetration市場滲透MarketDevelopment市場開拓ProductDevelopment產(chǎn)品開發(fā)Diversification多元化ConsolidationWithdrawalPrivatisationUnrelateddiversificationNewCompetences非相關(guān)多元化RelateddiversificationExistingCompetences相關(guān)多元化NewsegmentsNewareasNewusesBasedonAnsoff,andJohnsonandScholesThemarket/productdevelopmentmatrix市場/產(chǎn)品發(fā)展矩陣56PresentNewPresentNewMarketMMarketPenetrationAmarket-penetrationstrategyseekstoincreasemarketshareforpresentproductsorservicesinpresentmarketsthroughgreatermarketingeffortsConsolidation,withdrawal,demerger-declinephaseofproductlifecycle,raisefundsetc.

Developcompetences–marketing,quality,servicesetc

RetaincustomersSellmoretoexistingcustomersAttractnewcustomersincreasemarketshare57MarketPenetrationAmarket-penMarketdevelopmentMarketdevelopmentinvolvesintroducingpresentproductsorservicesintonewmarketsleverageexistingcompetencesbuildingnewcompetencesnewsegmentsnewareasnewuses58MarketdevelopmentMarketdevelProductdevelopmentProductdevelopmentisastrategythatseeksincreasedsalesbyimprovingormodifyingpresentproductsorservicesleverageexistingcompetencesbuildnewcompetencesnewtechnologyincreasemarketshare59ProductdevelopmentProductdevChapter5StrategicGeneration,Evaluation,andSelection

60Chapter5StrategicGeneration,ChapterOutlineMichaelPorter’sGenericStrategiesTypesofStrategiesIntegrationStrategies61ChapterOutlineMichaelPorter’ChapterOutline(cont’d)IntensiveStrategiesDiversificationStrategiesDefensiveStrategies62ChapterOutline(cont’d)IntensCorporateLevel--Concentrationstrategy

Afirmdirectsitsresourcestotheprofitablegrowthofasingleproduct,inasinglemarket,withasingledominanttechnologyThefirmthoroughlydevelopsandexploitsitsexpertiseinadelimitedcompetitivearena63CorporateLevel--ConcentrationCorporateLevel--ConcentrationstrategyConcentratedgrowthstrategiesleadtoenhancedperformance.Theabilitytoassessmarketneeds,knowledgeofbuyerbehavior,customerpricesensitivityandeffectivenessofpromotionConcentratingintheproduct-marketsegmentitknowsbestGrowththatresultsfromincreasedproductivity,bettercoverageofitsactualproduct-marketsegment,andmoreefficientuseofitstechnology64CorporateLevel--ConcentratioRiskandrewardsofconcentratedgrowthUnderstableconditions,concentratedgrowthposeslowerriskthananyothergrandstrategy,butinachangingenvironment,afirmcommittedtoconcentratedgrowthfaceshighrisksasingleproductmarketmakesafirmparticularlyvulnerabletochangesinthatsegmentHighopportunitycoststhatresultfromremaininginaspecificmarketandignoringotheroptionsthatcouldemploythefirm’sresourcesmoreprofitable65RiskandrewardsofconcentratCorporateLevel–IntegrationStrategies

Vertical

Integration

Strategies

Forward

IntegrationBackward

Integration

Horizontal

Integration

66CorporateLevel–IntegrationSIntegrationStrategiesGainControlOver--DistributorsSuppliersCompetitors67IntegrationStrategiesGainConForwardIntegrationStrategiesGainControlOver--DistributorsRetailersgainingownershiporincreasedcontroloverdistributorsorretailers

68ForwardIntegrationStrategiesForwardIntegrationStrategiesGuidelines--Currentdistributors–expensiveorunreliableAvailabilityofqualitydistributors–limitedFirmcompetinginindustryexpectedtogrowmarkedlyFirmhasbothcapital&HRtomanagenewbusinessofdistributionCurrentdistributorshavehighprofitmargins69ForwardIntegrationStrategiesBackwardIntegrationStrategiesOwnershiporControl--Firm’ssuppliersBackwardintegrationisastrategyofseekingownershiporincreasedcontrolofafirm’ssuppliers.Thisstrategycanbeespeciallyappropriatewhenafirm’scurrentsuppliersareunreliable,toocostly,orcannotmeetthefirm’sneeds70BackwardIntegrationStrategieBackwardIntegrationStrategiesGuidelines--Currentsuppliers–expensiveorunreliableThenumberofsuppliersissmall;ThenumberofcompetitorsislargeHighgrowthinindustrysectorFirmhasbothcapital&HRtomanagenewbusinessStableprices(rawmaterials&products)areimportantCurrentsuppliershavehighprofitmargins71BackwardIntegrationStrategieHorizontalIntegrationStrategiesOwnershiporControl--

Firm’scompetitorsHorizontalintegrationreferstoastrategyofseekingownershipoforincreasedcontroloverafirm’scompetitors.TheincreaseduseofhorizontalintegrationasagrowthstrategyMergers,acquisitions,andtakeoversamongcompetitorsallowforincreasedeconomiesofscaleandenhancedtransferofresourcesandcompetencies72HorizontalIntegrationStrategHorizontalIntegrationStrategiesGuidelines--GainmonopolisticcharacteristicsCompetesingrowingindustryIncreasedeconomiesofscale–majorcompetitiveadvantagesFalteringduetolackofmanagerialexpertiseorneedforparticularresource73HorizontalIntegrationStrategDiversificationStrategiesLessPopular--MoredifficulttomanagediversebusinessactivitiesHowever--Thegreatestriskofbeinginasingleindustryishavingallyoureggsinonebasket74DiversificationStrategiesLessTypesofStrategies

Diversification

Strategies

Concentric

DiversificationConglomerate

DiversificationHorizontal

Diversification75TypesofStrategies

DiversificDiversificationStrategiesLessPopular--Moredifficulttomanagediversebusinessactivities76DiversificationStrategiesLessConcentricDiversificationStrategiesAddition--New&relatedproducts/servicesDellcomputerpursedconcentricdiversificationbymanufacturingandmarketingconsumerelectronicsproductssuchasflat-paneltelevisionsandMP3players77ConcentricDiversificationStrConcentricDiversificationStrategiesGuidelines--Competeinno/slowgrowthindustryNew&relatedproductsincreasessalesofcurrentproductsNew&relatedproductsofferedatcompetitivepricesCurrentproducts—declinestageofproductlifecycleStrongmanagementteam78ConcentricDiversificationStrHorizontalDiversificationStrategiesAddition--New&unrelatedproducts/servicesforcurrentcustomersNotasriskyasconglomeratediversificationbecauseafirmalreadyshouldbefamiliarwithitspresentcustomersHospitalscreateminiaturemallsbyofferingbanks,bookstores,coffeeshops,restaurants,andotherretailstoreswithintheirbuildings79HorizontalDiversificationStrHorizontalDiversificationStrategiesGuidelines--Addingnewproducts/serviceswouldsignificantlyincreaserevenuesHighlycompetitiveand/orno-growthindustry;lowmargins&returnsCurrentdistributionchannelscanbeusedNewproductshavecountercyclicalsalespatterns80HorizontalDiversificationStrConglomerateDiversificationStrategiesAddition--New&unrelatedproducts/servicesBatterycompanyEnergizerHoldings,acquiredtheSchick-WilkinsonSwordrazorbusiness—thesecondlargestshavingproductscompanywith18%globalmarketshareinthewet-shavingbusiness81ConglomerateDiversificationSConglomerateDiversificationStrategiesGuidelines--Decliningannualsales&profitsCapital&managerialabilitytocompeteinnewindustryFinancialsynergybetweenacquiredandacquiringfirmsCurrentmarketsforpresentproducts-saturated82ConglomerateDiversificationSMergers&Acquisitions

Amerger

inbusinessoreconomicsreferstothecombinationoftwocompaniesintoonelargercompany.Suchactionsarecommonlyvoluntaryandofteninvolvestockswap.Inmanyinstancesamergerresemblesatakeover

Acquisitions:Acorporateactioninwhichacompany

buys

most,ifnotall,of

thetargetcompany'sownershipstakesinordertoassumecontrolofthetargetfirm.

Atakeover

istechnicallythesameasanacquisition,butthetermisoftentakentomeanthattheapproachofthelargeracquiringcompanyisunwelcomefromthepointofviewofthesmallertargetcompany83Mergers&Acquisitions

AmergeMergers&Acquisitions

ProvideimprovedcapacityutilizationBetteruseofexistingsalesforceReducemanagerialstaffGaineconomiesofscaleSmoothoutseasonaltrendsinsalesGainnewtechnologyAccesstonewsuppliers,distributors,customers,products,creditors84Mergers&Acquisitions

ProvideRisksforM&AsNotall

M&AsareeffectiveandsuccessfulAbouthalfofmergersproducednegativereturnstoshareholders--byBusinessWeekandtheWallstreetJournal’sstudyToo-highpurchasepriceforthestockofanexcellentcompanycanundotheeffectsofasubsequentdecadeoffavorablebusinessdevelopment--WarrenBuffett

85RisksforM&AsNotallM&AsReasonswhyMergersandAcquisitionsFailIntegrationdifficultiesInadequateevaluationoftargetLargeorextraordinarydebtInabilitytoachievesynergyToomuchdiversificationManagersoverlyfocusedonacquisitionToolargeanacquisition86ReasonswhyMergersandAcquisReasonswhyMergersandAcquisitionsFailDifficulttointegratedifferentorganizationalculturesReducedemployeemoralduetolayoffsandrelocationsM&Ascanyieldgreatbenefits,butthepriceandreasoningmustberight87ReasonswhyMergersandAcquisCO-OPETITIONGametheory:Abranchofappliedmathematicsthatprovidesasystematicwaytodevelopstrategieswhenoneperson'sfortunedependsonwhatotherpeopledo88CO-OPETITIONGametheory:AbraCO-OPETITION

CO-OPETITIONisanewwayofthinkingaboutbusiness.Somepeopleseebusinessentirelyascompetition.Theythinkdoingbusinessiswagingwarandassumetheycan'twinunlesssomebodyelseloses.Otherpeopleseebusinessentirelyasco-operation-teamsandpartnerships.Butbusinessisbothco-operationandcompetition89CO-OPETITIONCO-OPETITIONisaCO-OPETITIONStrategicAllianceisaformalrelationshipbetweentwoormorepartiestopursueasetofagreedupongoalsortomeetacritical