Chapter 12 Powerpoint Presentation

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    23-Dec-2014

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  • 1. Chapter 12 Learning Objectives
    • After studying this chapter, you should be able to:
  • articulate how institutions and resources affect alliances and acquisitions
  • gain insights into the formation, evolution, and performance of alliances
  • understand the motives and performance of acquisitions
  • participate in two leading debates on alliances and acquisitions
  • draw implications for action

2. 3. Institutions, Alliances, and Acquisitions

  • formal institutions set of formal legal and regulatory frameworks impacting:
  • (1) antitrust concerns
  • (2) entry mode requirements
  • informal institutions -imitation drives many alliance/acquisition decisions yet some firms rush into alliances and acquisitions without adequate due diligence and then get burned

4. 5. RESOURCES AND ALLIANCES VRIO Framework

  • Valuealliances-must create value by reducingcosts, risks, and uncertainties
  • real option -investment in real operations asopposed to financial capital
  • learning race -competitive situation in whichpartners aim to outrun each otherby learning the tricks from theother side as fast as possible
  • acquisition premium-difference between theacquisition price and the market value of targetfirms

6. RESOURCES AND ALLIANCES VRIO Framework

  • Rarity -ability to successfully manageinterfirm relationshipsoften calledrelational (or collaborative) capabilities may be rare
  • relational(orcollaborative )capabilities
  • relationships that occur within anorganization firms must have unique skillsto execute strategy

7. RESOURCES AND ALLIANCES VRIO framework

  • Imitability - one firms resources and capabilities maybe imitated by partners
  • -trust and understanding -firms withoutgood chemistry may have a hard timeimitating such activities
  • -firms that excel in integration possesshard-to-imitatecapabilities

8. RESOURCES AND ALLIANCES VRIO framework

  • Organization - alliance relationships are organized in a way that makes it difficult for others to replicate
  • - whether acquisitions add value boils down to how merged firms are organized to take advantage of the benefits while minimizing costs

9. 10. 11. PERFORMANCE OF ALLIANCES

  • Factors that may influence alliance performance:
  • (1) equity
  • (2) learning and experience
  • (3) nationality
  • (4) relational capabilities
  • None of these is able to assert an unambiguous, direct impact on performance

12. 13. 14.