Sac State MGMT 105 - Acquisition and Restructuring Strategies (34 pages)

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Acquisition and Restructuring Strategies



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Acquisition and Restructuring Strategies

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Pages:
34
School:
California State University, Sacramento
Course:
Mgmt 105 - Business Forecasting
Business Forecasting Documents

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CHAPTER 7 STRATEGIC ACTIONS STRATEGY FORMULATION PowerPoint Presentation by Charlie Cook The University of West Alabama 2007 Thomson South Western All rights reserved Acquisition and Restructuring Strategies Strategic Management Seventh edition Competitiveness and Globalization Concepts Cases Michael A Hitt and R Duane Ireland Robert E Hoskisson KNOWLEDGE OBJECTIVES Studying this chapter should provide you with the strategic management knowledge needed to 1 Explain the popularity of acquisition strategies in firms competing in the global economy 2 Discuss reasons why firms use an acquisition strategy to achieve strategic competitiveness 3 Describe seven problems that work against developing a competitive advantage using an acquisition strategy 4 Name and describe attributes of effective acquisitions 5 Define the restructuring strategy and distinguish among its common forms 6 Explain the short and long term outcomes of the different types of restructuring strategies 2007 Thomson South Western All rights reserved 7 2 Mergers Acquisitions and Takeovers What are the Differences Merger Two firms agree to integrate their operations on a relatively co equal basis Acquisition One firm buys a controlling or 100 interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio Takeover A special type of acquisition when the target firm did not solicit the acquiring firm s bid for outright ownership 2007 Thomson South Western All rights reserved 7 3 FIGURE 7 1 Reasons for Acquisitions and Problems in Achieving Success 2007 Thomson South Western All rights reserved 7 4 Reasons for Acquisitions Learning and developing new capabilities Reshaping firm s competitive scope Increased diversification 2007 Thomson South Western All rights reserved Increased market power Overcoming entry barriers Making an Acquisition Lower risk than developing new products Cost of new product development Increase speed to market 7 5 Acquisitions Increased



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