Term
| Alliance Types by Ownership Characteristics: |
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Definition
(1) Cooperative / Non-Equity
(2) Equity Based
(3) Franchise Alliance
(4) Joint Venture |
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Term
| Strategic Alliance Partner Types: |
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Definition
(1) Vendor / Supplier
Ex: Toyota
(2) Research/Product Development Firms. Ex: Biotech Firms
(3) customers
(4) other same channel positioned firms (5) internet firms
(6) competng firms |
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Term
| 3 Types of strategic alliance objectives |
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Definition
(1) Basic Objectives
(2) External Driven
(3) Internal needs based |
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Term
| Strategic Alliance Basic Objective Examples |
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Definition
(1) Risk Reduction
(2) Achieve Economies of Scale
(3) Technology Exchange
(4) Blocking competition
(5) Overcoming Gov't Mandated trade/investment barriers
(6) Facilitating International Expansion
(7) Linking complimentary contributions of partners in value chain: Quasi-Vertical Integration |
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Term
| The REALITY of strategic alliance basic objectives |
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Definition
| the alliance is both political and economic based: (1) it depends on internal political champions and (2) key stakeholder positions |
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Term
| Strategic Alliance: External Force Objective Examples |
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Definition
(1) Turbulence in world markets
(2) Economies of scale as comptv adv.
(3) Globalization of industry
(4) Globalization of technology
(5) Rapid changing of tech
(6) shortening prdct life cycle |
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Term
| Strat. Alliance: Internal Driven Objective Examples |
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Definition
(1) Gain skills/resources
(2) learning
(3) spread financial risk
(4) speed to market - 1st mover adv.
(5) cost minimization
(6) if poor performance - use to change business formula/model |
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Term
| Strategic Alliance: 3 types of TRUST |
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Definition
(CUBs) --
(1) Calculating
(2) Understanding
(3) Bonding |
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Term
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Definition
| Calculate the costs and benefits of actions to both parties. Cost of maintaining the relationship. |
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Term
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Definition
(1) Sharing common ways of thinking.
(2) Understanding thinking of a partner.
(3) Helps predict partner actions and behaviors. |
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Term
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Definition
(1) Sharing a common identification
(2) Hold Common values and obligations
(3) understanding others wants
(4) developing long-term relationships
(5) bonding b/w individuals |
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Term
| Phases of strat alliance development over time |
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Definition
(FInE)
Formation - Implementation - Evolution |
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Term
| Early stages of Strat Alliance need to: |
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Definition
| Explore legal and institutional safeguards. Communicate clearly and specifically who is responsible for what. |
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Term
| TRUST building initiatives |
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Definition
(1) Open communication
(2) Common controls and information systems.
(3) Conflict resolution process
(4) Clearly define mutual benefits
(5) Share information and ideas |
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Term
| Joint Collaboration Competitive Advantage |
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Definition
(1) Analyze Strategic Fit.
(2) Analyze Cultural Fit.
(3) Identify each Org's Goals.
(4) Develop methods of working together.
(5) Identify each partners contributions.
(6) Identify each partners competencies.
(7) Agreement on Termination Formuls. |
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Term
| Types/examples of Partner Assets |
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Definition
(1) fixed assets
(2) working capital
(3) expertise
(4) contact network
(5) brand names
(6) technology |
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Term
| Strategic Alliance Valuation depends primarily on? |
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Definition
(1) The Alliance Form: Joint Venture or Collaboration
(2) Contributions from each partner |
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Term
| 5 Key Rules of Engagement |
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Definition
| (1) Define Roles, Responsibilities, and Geography (2) Put an escalation process in place - dispute resolution (3) Develop Communication Plan (4) Develop Customer Proposal - customer deliverables (5) Successful delivery of solution |
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Term
| Stanford VIDEO: key points for successful merger/partnership |
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Definition
| (1) identify what bothers you about the merger. (2) define what the key characteristics of the new blended culture should be. (3) Develop a game plan to achieve #1 & 2. |
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Term
| Culture Due Diligence - 2 steps: |
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Definition
| (1) Identify Differences. (2) What to do about differences |
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Term
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Definition
(1) Tacit Knowledge - Difficult to verbalize, formalize, communicate.
(2) Explicit Knowledge - can verbalize, formalize and communicate. Can retain. |
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Term
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Definition
| recognize that one party will learn more than the other, so you must find ways to offset this |
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Term
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Definition
(1)not a strategic Priority.
(2)no rewards for learning, learning responsibilities not clear.
(3) HR Policies and culture issues. |
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Term
| Keys to effective alliance |
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Definition
(1) win-win benefits for both parties.
(2) cooperation b/w parties.
(3) open communication.
(4) Executive/Public commitment.
(5) creation of trust b/w both parties |
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Term
| Alliances can be used to: |
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Definition
| (1) gain early mover advantage. (2) lock in customers. (3) lock out competition. (4) gain synergy of resources and thinking. |
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Term
| How is Toyota's supplier relationship different than other companies |
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Definition
(1)embrace suppliers as partners
(2)encourage knowledge sharing with them
(3)help suppliers fine tune their operations |
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Term
| Toyota: consulting/problem solving |
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Definition
| Toyota provided expert consultants to assist suppliers in japan free of charge |
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Term
| Toyota competitive advntg from suppliers: |
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Definition
| providing suppliers with knowledge and tech to improve their productivity for just their operations that are dedicated to Toyota |
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Term
| Major reason why 70-75% of M&A's fail? |
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Definition
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Term
| Forces shaping/causing M&A growth: |
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Definition
(1)globalization
(2)changing economic realities
(3)increased competition
(4)technology/R&D
(5)Financial buyers - Private Equity |
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Term
| underlying strategy of M&A |
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Definition
Focus on "doing the deal".
underlying strategy is NOT the same as Deal Structure. |
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Term
| Why do OVERCAPACITY M&A's fail? |
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Definition
| Well established/large companies have entrenched processes and values -- makes it difficult to change. Acquirer has little experience with mega-deals |
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Term
| Overcapacity M&A Example: |
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Definition
Daimler-Chrysler: Daimler was an engineering centered company.
Chrysler was more sales and mktg focused. |
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Term
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Definition
| occur at earlier stage in industry life cycle than OVERCAPACITY M&A. Usually fragmented and smaller industries |
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Term
| Product or Market Extension M&A: |
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Definition
| usually involve moving into foreign markets. success depends, in part, on companies' size. generally more successful when big company acquires small company. |
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Term
| Product or Market Extension M&A: GE Example |
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Definition
| Success b/c paid attention to important differences b/w GE and the acquisition. GE systems were introduced slowly over time. *Got newly acquired company managers to use GE's resources to grow business. |
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Term
| M&A as a substitute for R&D |
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Definition
| This is a response to shortening product life cycles - builds market position quickly. IT and Biotech good examples. |
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Term
| M&A as R&D: What is the huge challenge with this type of M&A? |
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Definition
| Holding on to key people - acquisition is usually not successful if key experts leave. Speed is also an issue - speed of tech/market change vs. speed of company integration. |
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Term
| Leverage Buyouts (LBO) typically used by |
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Definition
| Private Equity. Firm is purchased and converted into a private company; heavy use of debt typical. |
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Term
| life cycle stage of business |
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Definition
| start ups -- early stage -- later stage -- mature under valued/turnaround firms |
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Term
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Definition
| industry with disappearing boundaries - inventing new industries. Ex: AT&T purchasing companies to converge computers and telecom. Ex 2:Sears entering financial services as an extension of retail. |
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