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CS-2 - Coggle Diagram

- - - - ex.Tableau&Salesforce
    - - ex.Amazon&Whole Foods
  - - - inability to actually integrate
    - - with a very clear thesis of where the value is going to come from
      - Put 80% of the energy on that 20% is going to do
  - - - reason for acquisition
        
        increase market power
        
        overcome entry barrier
        
        lower cost of new product development
        
        Increase speed to market
        
        lower risk compared to developing the new products
        
        Increased diversification
        
        avoiding excessive competition
      - problem
        
        intergration difficulties
        
        inadequate evaluation of the target
        
        higher debt ratio
        
        inability to achieve synergies
        
        too much diversification
        
        too large
        
        the bureaucratic cost
        
        avoid excessive competition
  - - - Friendly approch
        
        Ex amazon whole food merger
  - - - Friendly or unfriendly
        
        Ex singapore based broadcom made 117billion unsolicited offer to buy us tech company qualcom
  - - - Short run
        
        Average , neutral
      - Long run
        
        Significant declines
- - - - adverse selection
        
        arise both in the choice of partner and in the type of resources or assets contributed by the partner.
      - moral hazard
        
        accompany situations in which the partners performance of
        his responsibilities cannot be accurately or fully monitored
      - transaction costs
      - hold up
        
        takes the form of opportunistic renegotiation
  - - - negotiate a whole bunch of legal contractual terms
      - negotiate some general conditions
      - equity stake
      - walling off key technology
    - - needs to advance the strategic goals of both parties, have something to contribute towards the creation of value, and ideally seek a different benefit from the other party.
  - - - Microsoft and AT&T entered into in 2019.
        This alliance covered a number of things, but at its core were the Cloud, AI and 5G.
  - - - creates a separate third firm that both alliance partners co-own
        and also contribute resources(human capital and technology) to
        
        example
        
        biotechnology companies form alliances with pharmaceutical companies
- - - - Sells part of its ownership in a unit or cash (IPO),but parent still retains 50 ↑% ownership)
    - - Sale of a business unit to another firm(usually for a cash compensation)
    - - separation of a business unit from parent company
      - shares are distributed to the parent shareholders
- - - - how it is developed
        
        30 elements of value
        
        Maslow's hierarchy & systematic way to think about where value might come from in different context
        
        ex: next-generation digital offerings, amalgam of all sorts of technologies into old school offerings
      - how it is used
        
        fundamental thesis is that companies exist to create customer value full stop
      - fundamental belief that Bain is that companies don't change at all, people change and companies are collections of people.
      - get a company to change
        
        one by one get every person that company to want to change
        
        managing on individual level
        
        saying casting a vision for each person to say
        
        Giving them the time and space to internalize why they should change and then start to practice how to change and all that's really important
      - advising a manager or leader is thinking of creating change
        
        creating that vision of we call it the beach or that point of arrival, creating a preferred future for people that people can get excited about
        
        communicating that in a way that's accessible to all types of learners
        
        various ways of communicating the same message
      - problems with merger and acquisitions tends to be post-merger integration
        
        key issue is focus
  - - - diligence
        
        commercial, legal, financial, environmental
        
        investment standpoint
        
        management team, investment bank, private equity fund
        
        market size, market growth, competitive positioning, and different growth opportunities
        
        where the capital is coming from
        
        private equity fund is taking that capital and putting it to work