The case ‘The Leveraged Buyout Deal of Tata & Tetley’ provides insights into the concept of Leveraged Buyout (LBO) and its use as a financial tool in acquisitions, with specific reference to Tata Tea’s takeover of global tea major Tetley. This deal which was the biggest ever cross-border acquisition, was also the first-ever successful leveraged buyout by any Indian company. The case examines the Tata Tea-Tetley deal in detail, explaining the process and the structure of the deal. The case helps them to understand the mechanism of LBO. Through the Tata-Tetley deal the case attempts to give students an understanding of the practical application of the concept. Leveraged Buyout Deal of Tata & Tetley In the summer of 2000, the Indian corporate fraternity was witness to a path breaking achievement, never heard of or seen before in the history of corporate India. In a landmark deal, heralding a new chapter Continue reading
Business Strategies
Five Reasons Why Organizations Change Constantly
As an organization becomes larger the need for strategy and structure change becomes apparent. Strategic change involves altering employees’ construction of meanings by using a discourse that sets a new direction for a firm. All organizations need to make changes in their strategies, structures, management processes and administrative procedures. Many organizations go about this change using a dual core approach, which is a balance between the technical side and the management side of an organization. The technical side refers to the employees who actually produce the product or service that the company offers while the management side ensures that the day to day operations of the company are being fulfilled and the performance objectives are being met. While the two sides may have very different ideas of what changes need to take place, it is imperative that both sides be on the same page and working toward the same goal. Continue reading
ADL Matrix – The Arthur D Little Strategic Condition Matrix
The ADL Matrix or Arthur D Little Strategic Condition Matrix is a Portfolio Management technique that is based on the Product Life Cycle (PLC). It is developed in the 1980’s by Arthur D. Little, Inc. (ADL), one of the best-known consulting firms, intended to help a company manage its collection of product businesses as a portfolio. Like other portfolio planning matrices, the ADL matrix represents a company’s various businesses in a 2-dimensional matrix. It is a structured methodology for consideration of strategies which are dependent on the life cycle of the industry. The ADL approach uses the dimensions of environment assessment and business – strength assessment ie. Competitive Position and Industry Maturity. The environment assessment is an identification of the industry’s life cycle and the business strength assessment is a categorization of the company’s SBU’s into one of five competitive positions, these five competitive positions by four life cycle stages. Continue reading
Case Study: The Merger between Daimler and Chrysler
DaimlerBenz AG of Stuttgart, Germany, and the Chrysler Corporation of Auburn Hills, Michigan, surprised the business world at a press conference in London on May 7, 1998, when they announced their “merger of equals made in heaven.” This major cross-border transaction, with an equity value of $36 billion, was the largest merger of its kind to date. Robert Eaton and Jürgen E. Schrempp, co-chairmen of DCX, announced their expectation that this deal would be “not only the best strategic merger or the best prepared merger, but also the best executed merger.” Daimler-Benz Chief Executive Jürgen Schrempp had concluded as early as 1996 that his company’s automotive operations needed a partner to compete in the increasingly globalized marketplace. Chrysler’s Eaton was drawing the same conclusion in 1997 based on two factors emerging around the same time: the Asian economic crisis, which was cutting into demand, and worldwide excess auto manufacturing capacity, Continue reading
Case Study: Google’s Acquisition of Motorola Mobility
Motorola mobility, which was previously known as the mobile devices division of Motorola, until January 2011 when it was separated. The company produces smart phones, set top boxes, end to end video solutions and cable modems. As soon as automobiles were becoming popular, Motorola helped with entertaining the passengers, as it introduced the world’s first commercial portable cell phone. On the other Hand, Google a privately held company, founded by Larry page and Sergey Brin, two Phd students at the university of Stanford, it has been focused on technology innovations to help its users find the information with unprecedented levels of ease, accuracy and relevancy. Google primarily concentrated on the areas of search, advertising, operating systems and platforms, enterprise and hardware products. These programs include AdWords, AdSense, Google Display and Google Mobile, with Android and Google Chrome serve as its operating system and platforms. Google generate revenues primarily through delivering Continue reading
Michael Porter’s Four Corners Model
Profiling a specific competitor is often important to management. However, many competitive profiles will fail to give management insights into how competitors will respond to your own strategy. Understanding this inter-relationship is important for knowing how to position your company in relation to the competition. One of the most popular models for this type of competitor analysis is the so-called Four Corners Analysis. The Four Corners Analysis developed by Harvard Business School professor and strategy guru Michael Porter is a model well designed to help company strategists assess a competitor’s intent and objectives, and the strengths it is using to achieve them. By examining a competitor’s current strategy, future goals, assumptions about the market, and core capabilities, the Four Corners Model helps analysts address four core questions: What drives the competitor? Look for drivers at various levels and dimensions so you can gain insights into future goals. What is Continue reading