Strategic Entrepreneurship is integration of two disciplines: Entrepreneurship (Identifying opportunities through Innovation) and Strategic Management (Manage the firm’s resources/innovation efforts). So we can define strategic entrepreneurship as a firm’s efforts to exploit its today’s competitive advantages while exploring for the innovations that will be the foundation of tomorrow’s competitive advantages. Identifying opportunities to exploit through innovation is entrepreneurship dimension of strategic entrepreneurship, while determining the best way to manage the firm’s innovation efforts is the strategic dimension. Entrepreneur is a word derived from French language which means: “One who undertakes” and entrepreneurial capabilities are conditions in which new good or services can be launched to satisfy a need in the market. These opportunities exist because of the competitive imperfections in markets and among the factors of production and to produce them and when information about these imperfections is distributed asymmetrically among individuals. As a process, entrepreneurship results in creative destruction Continue reading
Corporate Strategies
Reverse Merger – Meaning and Example
Normally, a small company merges with large company or a sick company with healthy company. However in some cases, reverse merger is done. When a healthy company merges with a sick or a small company is called reverse merger. This may be for various reasons. Some reasons for reverse merger are: The transferee company is a sick company and has carry forward losses and transferor Company is profit making company. If transferor Company merges with the sick transferee company, it gets advantage of setting off carry forward losses without any conditions. If sick company merges with healthy company, many restrictions are applicable for allowing set off. The transferee company may be listed company. In such case, if transferor Company merges with the listed company, it gets advantages of listed company, without following strict norms of listing of stock exchanges. In such cases, it is provided that on date of merger, Continue reading
Case Study on Apple’s Business Strategies
Apple was founded by Steve Jobs and Stephen Wozniak in 1976; Apple Computers revolutionized the personal computer industry. Apple Computers Inc is considered to be one of the innovators in the computer industry. It brought about different changes to the industry; these changes are still visible in the present. The company’s products were used as a basis by other computer company’s in designing the specifications and physical characteristics of their product. It also serves as a meter of how products are designed. The company offers various products for the different market it targets. The products made by the company offer something different. We can describe Apple’s business strategy in terms of product differentiation and strategic alliances. Product Differentiation Apple prides itself on its innovation. When reviewing the history of Apple, it is evident that this attitude permeated the company during its peaks of success. For instance, Apple pioneered Continue reading
Advantages and Disadvantages of Mergers and Acquisitions
In 21st century businesses are the game of growth. Every business want the optimum market share (growth) over their competitors, so companies are trying to get optimum growth by using the most common shortcut i.e. Merger and Acquisition (M&A). The growth main motive is financial stability of a business and also the shareholders wealth maximization and main coalition’s personal motivations. Mergers and acquisitions (M&A) provides a business with a potentially bigger market share and it opens the business up to a more diversified market. In these days it is the most commonly use methods for the growth of companies. Merger and Acquisition (M&A) basically makes a business bigger, increase its production and gives it more financial strength to become stronger against their competitor on the same market. Mergers and acquisitions have obtained quality throughout the world within the current economic conditions attributable to globalization, advancements of new technology and augmented Continue reading
Leveraged and Management Buyouts
There are various options available for the revival of a ‘sick company. One is buyout of such a company by its employees. This option has distinct advantages over Government intervention and other conventional remedies. Buyout by employees provides a strong incentive to the employees in the form of personal stake in the company. The employees become the owners of the company by virtue of the shares that are issued and allotted to them. Moreover, continuity of job is the greatest motivating force which keeps them on their toes to ensure that the buyout succeeds. Such a buyout saves mass unemployment and unrest among the working class. Relations between the worker management and the employees are expected to be cordial without any break, strike or other such disturbing developments. Hence chances of success are more. However, such a buyout can be successful only if necessary financial support is extended by the Continue reading
Business Valuation
Business valuation is the process of assessing the worth of the enterprise which is subject to merger or takeover so that the consideration amount can be quantified and price of one enterprise for the other can be fixed. Such valuation helps in determining the value of shares of the acquired and acquiring company to safeguard the interest of the shareholders of both the companies. The share of any member in a company is a movable property and can be transferred in the manner provided in the articles. A share represents a bundle of rights like right to elect directors, to vote on resolutions of the company, share in the surplus, if any, on liquidation etc. Valuation of shares in an amalgamation or takeover is made on a consideration of a number of relevant factors, such as stock exchange prices of the shares of the two companies, the dividends paid on Continue reading