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SMMCG9[CS-2]LN9&LN12, Disney, build and inforce trust - Coggle Diagram

- - - - increase diversification and reduce the overall risk
        
        avoid excessive competition
        
        lower risk compared to developing new product
        
        increase market power
        
        synergies
        
        stretching strategy
        
        1+1>2
        
        applying the acquirer's capabilities
        
        develop new organizational capabilities
        
        leveraging strategy
    - - overcome the competitive disadvantege/ entry barriers
  - - - Have a strong, credible post-merger plan for realizing the synergies
      - This value is not dissipated by the cost acquisition
      - The combined businesses have the potential for valuable synergies
  - - - Negative
        
        the combined company is even less valuable than the two companies separately.
      - Positive
        
        To get premium
  - - - efficient market wall
        
        create value by simply picking good companies to acquire
        
        prevent overpaying for targets
      - the winner's curse
        
        valuing the target
        
        absolute secrecy
        
        not match other bidders
- - - - e.g.Google's foray into cellphones
- - - - longer-term,relational contracts
      - Technology licensing arrangements
      - Equity alliances
      - Joint ventures
        
        Create a seperate third firm both alliance partners co-own&also contribute resources to human capital technology
    - - Access capabilities or market quickly&surely :smiley:
        
        Companies may come together&form am alliance to reduce each of their asset commitment &maintain some flexibility to invest in other opportunities
      - Learn from its partner&upgrade its resources :smiley:
        
        A complaint that many companies nave with its partners in developing countries(e.g.China) :no_entry:
      - One firm don't have to shoulder all the cost&risks from new business opportunities :smiley:
        
        Also means the reward need to be shared :no_entry:
      - Building a common technology standard :smiley:
        
        e.g.Microsoft and AT&T
    - - The partners may not have the same view about a actions
      - They may not trust each other to come through even if a common approach is agreed upon
      - The problem of any market-based govermance
      - 3 types
        
        Adverse selection
        
        May arise both in the choice of partner and in the type of resources or assets contributed by partners
        
        Moral hazard
        
        The partners performance of his responsibilities cannot be accurately or fully monitored
        
        Hold-up
        
        often takes the form of opportunistic renegotiation
    - - structure the alliance
        
        negotiate legal contractual terms
        
        approach specific goal and it will no need to adjust of circumstance changes
        
        self-enforcing contract(hostage)
        
        ensure the other side will behave in expected if circumstance change
        
        other
        
        walling off key technology
      - ongoing management
        
        system of mutual agreements and governance
      - partner choice
        
        Good partner :smiley:
        
        contribute toward the creation of value
        
        seek different benefit from the other partner
        
        get fair share of the value they created
        
        Bad partner :fire:
        
        take most of advantage but do nothing
        
        how to prevent bad partner :!:
        
        do homework and research on potential partner in advance
      - set up relational governance
        
        reciprocity
        
        joint action
        
        informal mutual trust
        
        convergent expectation supported by reputation and repented interaction
      - revaluate alliance
        
        if partner still contribute valuable resources that you need
        
        if alliance still provide strategic overlap
- - - - get every person to change
        
        create vision
        
        people can get excited about
        
        communicate to all types of peple
        
        multifaceted communication
    - - focus :!:
        
        very clear thesis
        
        can be written down, quantified, enumerated
  - - - capital
        
        where the capital is coming from
      - investment standpoints
        
        work with all groups
    - - male sure
        
        things really exist
        
        hypothesis can be proven out
      - have
        
        statements
        
        how value is going to be created
        
        data
        
        confirm or dis-confirm that statement that we have
- - - - Scope :arrow_down:
    - - Merger
        
        Acquisition
        
        usually unfriendly hostile takeover
        
        Friendly combing two companies
      - Acquirer company
        
        Target company
    - - Scope :arrow_up:
- - - - sell the BU to another firm for a cash compensation
        
        smaller unit
        
        fastest execute
    - - the business is separated completely
        
        its share are distributed to the parent shareholder
        
        large unit
    - - sell part of its ownership in a unit for cash
        
        parent company still have 50 percent ownership
        
        slowest execute
- - - - made a number of memorable movies
  - - - Jeffrey Katzenberg left
        
        still making animated movies the traditional way
        
        new wave
        
        CG movie
        
        star wars
        
        spun off as Pixar
        
        Toy Story :star:
  - - - went into slump
  - - - had 120 Academy Awards
        
        get a higher share of the profits from Disney
  - - - Disney World in Florida
  - - - 2009, Marvel Studios
        
        2012, Lucasfilm
  - - - also synergies
        
        e.g. Disneyland in Southern California.