Acquisition can be undertaken through merger or takeover route. Takeover is a general term used to define acquisitions only and both terms are used interchangeably. A Takeover may be defined as series of transacting whereby a person, individual, group of individuals or a company acquires control over the assets of a company, either directly by becoming owner of those assets or indirectly by obtaining control of management of the company. Takeover is acquisition, by one company of controlling interest of the other, usually by buying all or majority of shares. Takeover may be of different types depending upon the purpose of acquiring a company. A takeover may be straight takeover which is accomplished by the management of the taking over company by acquiring shares of another company with the intention of operating taken over as an independent legal entity. The second type of takeover is where ownership of Continue reading
Business Strategies
Case Study of Burger King: Achieving Competitive Advantage through Quality Management
Burger King Corporation (BKC) is the world’s second largest fast-food hamburger chain which trailing only McDonald’s. Over 11 million customers visit their restaurants worldwide each day and over 2.4 billion of its burgers are sold each year across the global. How do they able to achieve it? What are the reasons? Apart from their strategies, the main cause that leads to have these results today is their quality. By having a good quality, it will bring the company to have a good reputation. This is important because it can affect the entire organization from suppliers to customers, by incurring the lower cost and obtain higher profit. Therefore, through managing and improving the quality, the firm will be able to build and implement successful strategies as well as provide competitive advantages. In order to achieve competitive advantages in the fast-food industry, Burger King Corporation had put many efforts in their strategies Continue reading
Case Study: Reasons Behind the Collapse of Research in Motion (RIM)
Jim Balsillie and Mike Lazaridis are running Research in Motion (RIM) as co-CEOs since 1993 successfully until 2011 and the company had been through a turbulent year. Analysts and investors believe that co-CEOs are ruining the company. Lazaridis takes care of the technical side (Engineering & R&D) and Balsillie is responsible for the Finance, sales and marketing. Lazardis built Blackberry, a device which was a new type of wireless handheld solution for companies and it created an uncontested market space with in the enterprise segment and companies saved time and money because employees can access email almost from any place at any time without having to go back to the office. Balsille sold the device successfully to Companies and Governments and created an uncontested market space with in the enterprise segment, reaching beyond existing demand to unlock a new mass of customers (B2B) that did not exist before and aggressively Continue reading
Different Types of Mergers
In perspective of merger and acquisition there are different types of mergers that host a difference between each one it. Each merger derived with specific reasons depending on the fitting characteristics in cross boarder operation. Each type of merger will be discussed in detail to know the differences and their characteristics. 1. Horizontal Merger It is a merger of two or more companies that compete in the same industry. It is a merger with a direct competitor and hence expands as the firm’s operations in the same industry. Horizontal mergers are designed to produce substantial economies of scale and result in decrease in the number of competitors in the industry. The merger of Tata Oil Mills Ltd. with the Hindustan lever Ltd. was a horizontal merger. In case of horizontal merger, the top management of the company being meted is generally, replaced, by the management of the transferee company. One Continue reading
Merger Approaches
Irrespective of the type of merger, there are at least two firms involved. One, the buying company that acquires the other company, and survives after merger. This firm is known as an acquiring firm or transferee company. The other is the company, which is merged and loses its identity in the process. This is called the acquired company, or transferor company or the target firm. There are various modes in which the acquiring firm can attempt a merger move and therefore, merger can also be classified on the basis of initiative style or the procedure adopted by the acquiring firm. The most important merger approaches are as follows: 1. Negotiated Merger It is also called friendly merger. In this case, the management/owners of both the firms sit together and negotiate for merger. The acquiring firm negotiates directly with the management of the target firm. So, the willingness of the management Continue reading
The Role of HRM in Developing Organizational Strategy
Human Resource Management (HRM) business strategy emphasizes the importance of individual relationships against collective relations between managers or managers and workers. Human Resource Management (HRM) refers to an activity that depends less on hierarchies, orders and mandates, and stresses the importance of active participation of all employees of the company. The aim is to foster a cooperative relationship between management and workers to prevent frequent clashes resulting from a traditional hierarchical relationship. When HRM is working properly, employees are committed to long-term goals of the organization, allowing it to adapt better to changes in markets. Human Resource Management (HRM) involves taking a range of measures which include: the commitment of employees with corporate objectives, the payment of wages according to productivity of each employee, fair treatment to them, continuing vocational training and link procurement policy to other aspects of organizing work and production, marketing and sales. Some companies carry out Continue reading