Professional Documents
Culture Documents
Ice Breakers
You will either step forward into growth or you will step back into safety. Abraham Maslow Without continual growth and progress, such words as improvement, achievement, and success have no meaning. Benjamin Franklin The strongest principle of growth lies in the human choice. George Eliot It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin
What is Restructuring?
Restructuring can be construed as action for change in financial structure, business portfolio or ownership so as to increase the value of a firm.
Source: Elijah Ezendu, Restructuring
A significant modification made to the debt, operations or structure of a company. This type of corporate action is usually made when there are significant problems in a company, which are causing some form of financial harm and putting the overall business in jeopardy. The hope is that through restructuring, a company can eliminate financial harm and improve the business.
Source: Investopedia
A fundamental change in the way in which an organisation is structured that may involve increasing or decreasing the various layers of staff between the top and the bottom of the hierarchy or re-assigning roles and responsibilities within it.
Source: HRdictionary.com
Assets
Either Reorganize the Business
Liabilities
Debt
Or Reorganize the Financing
Equity
Types of Restructuring
1. Portfolio Restructuring: Reducing or Increasing a firms business. For example, acquisition or spin-off 2. Financial Restructuring: Altering a firms capital structure. For example, LBO 3. Organizational Restructuring: Rearranging the organizational structure, system or design template of a firm. For example, downsizing.
Alliance
Alliance is definite agreement between firms such that each shall commit resources to achieve common set of objectives.
Strategic Intent
Cost Management
Diversification
Visionary Stride
Culture
Relationship
Capability
Alliance
Finance
Rationale
Legal Framework
Structure
Types of Alliance
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Joint R & D Licensing Preferred Suppliers Co-Marketing Coopetition Minority Investment Joint Production Equity Joint Venture Multi-Partner Consortia Outsourcing Collaboration
To increase access to health care, enhance quality and manage costs, we must embark on a process of collaboration and interdependence.
- Prof Morgan Chetty, Practice Matters: Collaboration and Interdependence ( Medical Chronicle)
Types of Collaboration
Loose Collaboration Definite Collaboration
Loose Collaboration
This is an unstructured agreement between two or more practitioners/clinics/medical centers for handling cases together or effecting referrals. Its usually established through word of mouth engagement devoid of broad clarification. The major problems of loose collaboration stem from challenging expectation management and lopsided consideration.
Definite Collaboration
Its a structured agreement between two or more practitioners/clinics/medical centers for handling cases together or effecting referrals. It should feature a clear framework of relationship showing standard of work, performance expectations and mutually acceptable consideration well-crafted as tenets of an endorsed Memorandum of Agreement (MOA).
Benefits of Collaboration
Provides enablement for achievement of customer-centred service. Enhancement of customer satisfaction. Facilitates management of clients (patients) throughout the collaborative value network. Gives room for accelerating quality of service throughout the collaborative value network. Boosts interdisciplinary communication and productivity. Builds a lock-in system for promoting customer engagement
Exercise
Dr Johnson is a medical practitioner, who owns a small-size clinic that has a ward-strength of 6 patients. What alliances can he develop for enhancing total services?
Alliance Design
Alliance Implementation
Alliance Management
Competitive Strategy
Alliance Strategy
Alliance Capability
Alliance Design
Alliance Implementation
Alliance Management
Review
Coopetition Strategy
Coopetition strategy is a type of inter-firm strategy which permits and constrains the competing firms involved in alliance to manage a partially convergent interest and goal structure while creating value by means of coopetitive advantage.
The physicians find themselves in certain situations where cooperation is appropriate. A strategic relationship with a hospital may require some occasions of cooperation where partnering on a joint venture may bring a new service to the community while simultaneously competing with the same hospital to provide a different outpatient service.
- Grace Terrell, Time for Coopetition is Now
Do other opportunities exist for coopetition in wound care? I believe they do. Let's consider the possibilities for a moment. Visualize an everexpanding global wound care pie, with its slices representing patients, practitioners, manufacturers, educational conferences, and accreditation and certification programs. Imagine more and more entrants to the wound care industry, joining forces with each other to gain a piece of the greater pie.
- Richard Salcido, Coopetition in Wound Care
The rules of healthcare are changing. Today, growth isnt about just getting bigger. Its about developing all of the components needed for coordinated care and reduced costs.
- Source: HealthLeaders Media, Hospital Merger and Acquisition Strategies
Targets Response
Options: Accept the terms, attempt to negotiate, execute a poison pill or find a White Knight
Types of Mergers
The following are distinguished by relationship Horizontal Merger Vertical Merger Market-Extension Merger Product-Extension Merger Conglomeration The following are distinguished by financing Purchase Merger: A firm pays for another with cash or debt instrument such as bills, bonds, certificates of deposit, bankers acceptances Consolidation Merger: Merging firms are bought and combined under new entity
Types of Acquisition
Conventional Acquisition: A firm buys another with cash, stock or combination of the two. Acquisition by Asset-Purchase: Company A buys all the assets of Company B for cash, then Company B will have only cash (and whatever debt they had before) and become a shell, which may eventually liquidate or enter another area of business. Reverse Merger: A private firm in a bid to raise financing buys a publicly listed shell firm, and moves thereinto in so doing become an entirely new firm with tradable shares.
The Rise of Fortis Global Healthcare Holdings Pte Ltd Through Acquisition
Fortis acquired Hong Kong-listed Quality Healthcare Asia Ltd (QHA) for about Rs 882 crore. With this Fortis Global got a network of over 60 wholly-owned medical centres, over 500 affiliated clinics, over 40 dental and physiotherapy centres, and a private nursing agency with a database of over 3,000 nurses in Honk Kong. Then it offered to pick up controlling stake in the Australia based Dental Corporation. Dental Corporation is the largest operator of dental practice in Australia and New Zealand with presence in 135 locations. Fortis Global has also announced the acquisition of a cancer speciality hospital project in Singapore for Rs 115 crore. Adapted from The Hindu Business Line
Divestiture
This is the outright sale of a firms asset, division or subsidiary either as a fundraising measure or strategic alignment aimed at eliminating unfit organizational components or in defense against take over or due to low profitability.
Equity Carve-Out
A parent firm makes a subsidiary public through IPO, and selling small percentage to the public while keeping controlling stake.
Starbursting
This is the break-up of a star-like firm into smaller firms by delineating core business and a collection of other focus areas, giving room for the parent company to concentrate only on its core business and allow relevant business units to spring up as individual firms, wherefore each would concentrate on applicable focus area.
Advantages of Starbursting
Development of Focused Management Effective Distribution of Corporate Debt Development of Specialised Talents Reculturalization of Business Unit to Best Industry Fit Instead of One-Size Fits All. Leadership Devolution to Business Unit. Boosting Aggregate Value for Shareholders. Increase in Operational Efficiency Appropriate Strategic Positioning to Explore and Exploit Each Focus Area.
Spin-Offs
This occurs when a subsidiary becomes independent company through distribution of its shares to shareholders of the parent firm, usually on a pro rata basis. It cant be used for immediate fundraising.
Rightsizing
This involves ascertainment of targeted service requirements, implementation of workload mechanics for identifying distinct job contributions, execution of job redesign for effectuality, repositioning of job roles and development of performance-fitting structure.
Rightsizing usually give rise to shrinking of oversize units, expansion of understaffed ones, as well as establishment of new essential sections or departments.
Downsizing
Its a type of organizational restructuring that focus on streamlining, tightening and shrinking organizational structure with respect to workforce.
Alternatives to Downsizing
Early retirement as a method for inducing voluntary shrinkage Establishment of programmes for trimming waste Across-the-board salary cut. Perform hiring-freeze and halt recruitment. Retraining employees, and adjust them strategically Transfer of employees from area of non-requirement to necessities Reduction of the work-week Reduce the size of workforce by attrition Implement furlough Introduce contract labour into the workforce
Case Examples
1. Acquisition of Regency Hospital Company LLC by Select Medical Holdings Corporation thereby expanding network of acute care hospitals from 89 to 112. Value of deal was $210 million. Deal Date: June, 2010. 2. Acquisition of RehabCare Group by Kindred Healthcare Inc for the purpose of penetrating the market, reducing cost, while expanding offerings and operational locations. Value of Deal was $900 million. Deal Date: Feb, 2011.
Thank You
For additional information: Dr. Elijah Ezendu