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G3_[CS-2] Corporate Transactions, strategic alliances, G3 Group members,…

- - - - stretching
        
        develop new capabilities
        
        Ex : Salesforce's acquisition of Tableau
      - leveraging
        
        apply own capabilities
        
        Ex : Amazon's purchase of Whole Foods
  - - - exit by selling off the target
        
        IPO
        
        sale to another company
    - - identify targets that might be undervalued by the market for a reason
      - have a thesis about how the target firm's value can be
        improved
        
        to bring in better management
      - leverage its capability to improve management and create value from the target
  - - - operational
      - organizational
- - - - separated completely from the parent company
        
        it shares are distributed to the parent’s shareholders
        
        parent’s shareholders can exchange their shares for that of the unit
    - - sell part of its ownership in a unit for cash, but still retains control
        
        IPO involves
    - - simply sold to another firm, usually for a cash compensation.
  - - - spin-offs create the most value
    - - unit sales (fastest)
      - carve-outs (slowest)
    - - unit sales (smaller)
      - spin off (largest)
  - - - get rid of low profitability units
      - to reduce the risk or liability
      - lack of strategic fit (low synergies)
    - - resources/capabilities
      - entrepreneurial
      - innovative potential
- - - - increase revenues
  - - - pay too much for the company
    - - higher debt ratio
  - - - clear
        identification and quantification of the types of synergies
    - - objectivity in evaluating and
        bidding for the target company
    - - have some financial slack
- - - - learning through corporate transactions
      - acquire resources
        
        EX:Google
- - - - customer value component
      - B2B component
    - - customer value proposition can be measured
        
        analysis
        
        control
        
        strategy
      - combined with Maslow's hierarchy
        
        predict customer's mind
        
        creating new product/service
    - - composed with changing people
  - - - For example, insurance company
    - - contribute framework and value proposition
    - - do not judged by appearance content of a company
      - identify the position of company
- - - - contractual safeguards
      - credible commitments
      - walling off key technology
      - manage the risk, opportunism, and conflict
      - relational governance
- - - - Managers can benefit from the merger, such as the company's risk reduction
    - - Managers believe that mergers and acquisitions can expand the company's territory, and believe that it is correct