Professional Documents
Culture Documents
Joint marketing
Joint sales or distribution
Joint production
Design collaboration
Joint research
Projects to jointly develop new technologies or products
Joint Venture Financial Partnership / Sharing Control / Sharing Profit & Loss
Benefits of Alliances to Achieve Global
and Industry Leadership
Get into critical country markets quickly to accelerate process of
building a global presence
Gain inside knowledge about unfamiliar markets and cultures
Access valuable skills and competencies concentrated in particular
geographic locations
Establish a beachhead (base) to participate in target industry
Master new technologies and build new expertise faster than would
be possible internally
Open up expanded opportunities in target industry by combining
firms capabilities with resources of partners
Other Benefits of Strategic Alliances
Pitfalls Strategic Alliances
Guidelines in Forming Strategic Alliances
Joint Ventures
Going with a partner in foreign country:
Types of JVs:
Contractual Joint Ventures (for projects with time frame)
Equity Joint Ventures (long term)
In the 1999 merger of Glaxo Wellcome and SmithKline Beecham, both firms
ceased to exist when they merged, and a new company, GlaxoSmithKline,
was created.
When the deal is unfriendly (that is, when the target company does not want
to be purchased) it is always regarded as an acquisition.
Merger and Acquisition Strategies
Merger Combination and pooling of equals, with newly created
firm often taking on a new name
Acquisition One firm, the acquirer, purchases and absorbs
operations of another, the acquired
Merger-acquisition strategy
Much-used strategic option
Especially suited for situations where alliances do not provide a
firm with needed capabilities or cost-reducing opportunities
Ownership allows for tightly integrated operations, creating more
control and autonomy than alliances
Objectives of Mergers and Acquisitions
To create a more cost-efficient operation
To expand a firms geographic coverage
To extend a firms business into new product categories or
international markets
To gain quick access to new technologies or competitive
capabilities
To invent a new industry and lead the convergence of industries
whose boundaries are blurred by changing technologies and
new market opportunities
Rationales for M&A
Acquiring firms seek improved financial performance or growth by:
Support Distributors
Services or Retailers
efficiently
Firm can concentrate on core value chain activities that best suit its resource
strengths
Risk: Losing touch with activities and expertise that determine overall long-term
success
Offensive and Defensive Strategies
Type of marketing warfare strategy designed to obtain an objective, usually market
share, from a target competitor.
In addition to market share, an offensive strategy could be designed to obtain key
customers, high margin market segments, or high loyalty market segments.