Chapter 9 - Corporate Strategy - Mergers and Acquisitions Strategic Alliances

  1. Why are M&A's still desired despite the fact they can destroy shareholder value and acquirers paying a premium?
    • Pincipal-agent problems
    • Overcome competitive disadvantage
    • Superior acquisition and integration capability
  2. What are some reasons firms enter strategic alliances?
    • Strengthen competitive position
    • Enter new markets
    • Hedge against uncertainty
    • Access critical complementary assets
    • Learn new capabilities
  3. What are some benefits of merging with competitors
    • Reduce competitive intensity
    • Lower costs
    • Increased differentiation
    • Access to new markets and distribution channels
  4. The purchase or takeover of one company by another; can be friendly or unfriendly
    Acquisition
  5. A firm's ability to effectively manage three alliance-related tasks concurrently
    1- Partner selection and alliance formation
    2 - Alliance design and governance
    3 - post-formation alliance management
    Alliance management capability
  6. Conceptual model that aids strategists in deciding whether to pursue internal development, enter a contract arrangement or strategic alliance, or acquire new resources
    Build-borrow-or-buy framework
  7. Cooperations by competitiros to achieve a strategic objective
    co-opetition
  8. Equity investments by established firms in entrepreneurial ventures; CVC fall sunder the broader rubric of equity alliances
    Corporate venture capital (CVC)
  9. Partnership in which at least one partner takes partial ownership in the other
    Equity alliance
  10. Knowledge that can be codified (e.g. information, facts, instructions, recipes) concerns knowing about a process or product
    Explicit knowledge
  11. The process of merging with competitors, leading to industry consolidation
    Horizontal integration
  12. Acquisition in which the target company does not wish to be acquired
    Hostile takeover
  13. Situations in which both partners in a strategic alliance are motivated to form an alliance for learning, but the rate at which the firms learn may vary; the firm that accomplishes its goal more quickly has an incentive to exit the alliance or reduce its knowledge sharing
    Learning races
  14. A form of self-delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary
    Managerial hubris
  15. The joining of two independent companies to form a combined entity
    • Merger
    • Friendly Approach
    • Earnst & Young
  16. Partnership based on contracts between firms. The most frequent forms are supply agreements, distribution agreements and licensing agreements
    Non-equity alliance
  17. Approach to strategic decision making that breaks down a larger investment decision into a set of smaller decisions that are staged sequentially over time. This approach allows the firm to obtain additional information in pre-determined stages
    real-options perspective
  18. Strategic management framework that proposes that critical resources and capabilities frequently are embedded in strategic alliances that span firm boundaries
    a relational view of competitive advantage
  19. Knowledge that cannot be codified; concerns knowing how to do a certain task and can be acquired only through active participation in that task
    Tacit knowledge
  20. Most common form of alliance that involves vertical strategic alliances and firms share explicit knowledge
    Non-equity alliances
  21. Type of alliance that has the strongest ties, trust, and commitment. Created and owned by 2 or more companies, longterm commitment used to enter foreign markets. Least common
    Joint venture
  22. Type of alliance where at least one partner takes partial ownership and allows for the sharing of tacit knowledge that cannot be codified
    Equity alliances
  23. Voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage
    Strategic Alliances
  24. One or more of what 5 alliance formation reasons should be present for partner selection and alliance formation?
    • Strengthen competitive position
    • Enter new markets
    • Hedge Against uncertainty
    • Access critical complementary resources
    • Learn new capabilities
  25. What 3 options do strategist have to drive firm growth
    • Organic growth through internal developmentExternal growth through alliances
    • External growth through acquisitions
  26. Why do most mergers and acquisitions destroy shareholder value
    Because anticipated synergies never materialize
  27. What 3 reasons do firms engage in acquisitions
    • Access new markets and distribution channels
    • Gain access to a new capability or competency
    • Preempt rivals
  28. An alliance qualifies as strategic if it has the potential to
    Affect a firm's competitive advantage by increasing value and/or lowering costs
  29. How can firms build a superior alliance management capability
    Through "learning-by-doing" and by establishing a dedicated alliance function
Author
Kimmiey
ID
330520
Card Set
Chapter 9 - Corporate Strategy - Mergers and Acquisitions Strategic Alliances
Description
Management
Updated