-
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
-
What are some reasons firms enter strategic alliances?
- Strengthen competitive position
- Enter new markets
- Hedge against uncertainty
- Access critical complementary assets
- Learn new capabilities
-
What are some benefits of merging with competitors
- Reduce competitive intensity
- Lower costs
- Increased differentiation
- Access to new markets and distribution channels
-
The purchase or takeover of one company by another; can be friendly or unfriendly
Acquisition
-
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
-
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
-
Cooperations by competitiros to achieve a strategic objective
co-opetition
-
Equity investments by established firms in entrepreneurial ventures; CVC fall sunder the broader rubric of equity alliances
Corporate venture capital (CVC)
-
Partnership in which at least one partner takes partial ownership in the other
Equity alliance
-
Knowledge that can be codified (e.g. information, facts, instructions, recipes) concerns knowing about a process or product
Explicit knowledge
-
The process of merging with competitors, leading to industry consolidation
Horizontal integration
-
Acquisition in which the target company does not wish to be acquired
Hostile takeover
-
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
-
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
-
The joining of two independent companies to form a combined entity
- Merger
- Friendly Approach
- Earnst & Young
-
Partnership based on contracts between firms. The most frequent forms are supply agreements, distribution agreements and licensing agreements
Non-equity alliance
-
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
-
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
-
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
-
Most common form of alliance that involves vertical strategic alliances and firms share explicit knowledge
Non-equity alliances
-
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
-
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
-
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
-
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
-
What 3 options do strategist have to drive firm growth
- Organic growth through internal developmentExternal growth through alliances
- External growth through acquisitions
-
Why do most mergers and acquisitions destroy shareholder value
Because anticipated synergies never materialize
-
What 3 reasons do firms engage in acquisitions
- Access new markets and distribution channels
- Gain access to a new capability or competency
- Preempt rivals
-
An alliance qualifies as strategic if it has the potential to
Affect a firm's competitive advantage by increasing value and/or lowering costs
-
How can firms build a superior alliance management capability
Through "learning-by-doing" and by establishing a dedicated alliance function
|
|