A merger is a complicated transaction, involving fairly complex legal considerations. While evaluating a merger proposal, one should bear in mind the following legal provisions. Sections 391 to 394 of the Companies Act, 1956 contain the provisions for amalgamations. The procedure for merger or amalgamation normally involves the following steps: Examination of object Clauses: The memorandum of association of both the companies should be examined to check if the power to amalgamate is available. Further, the object clause of the amalgamated company (transferee company) should permit it to carry on the business of the amalgamating company (transferor company). If such clauses do not exists, necessary approvals of the shareholders, boards of directors and Company Law Board are required. Intimation to stock Exchanges: The stock exchanges where the amalgamated and amalgamating companies are listed should be informed about the amalgamation proposal. From time to time, copies of all notices, resolutions, and Continue reading
Strategic Management Concepts
Case Study: Amazon’s Competitive Advantage
Amazon.com is a multinational E commerce company, which was founded by Jeff Bezos who is considered to be one of the world’s top innovative executives. Amazon.com started as an online bookstore and expanded with time to sell almost everything. The role of information system in this company is a leading role, because the company is an online retailer. The company started as an online store for books to rapidly expand to sell everything such us beauty items, auto parts, apparel, electronics and groceries. Amazon’s logo shows an arrow that stretches from A to Z, which also forms a smile to indicate Amazon’s care for customers’ satisfaction. Core Competency The core competencies for Amazon has been identified as customer convenience and accessibility, unlimited options for selection, custom-made services, the superiority of the content of the web site, the efficient and good quality search tool to find the items of one’s choice Continue reading
Top Reasons for Mergers and Acquisitions in Global Scenario
Mergers and acquisitions are considered as one of the routes by which organisations can expand their presence into new markets across geographies or product segments. Essentially these forms of expansion are external in nature in that they all have an element of foreign presence attached to them. These methods of expansion of business have the advantages of reducing risks as there is a new local knowledge or expertise which is added onto the organisation. There are potential for the acquired organisation to bring in new knowledge and synergies to the total organisation which may be valuable in operating in the new market conditions. But along with the advantages to the organisation there are also associated disadvantages also of falling into debt due to the leveraged nature of the acquisition and higher risk of bankruptcy of the organisation. These factors are analysed below. Too much Debt and Risk of Bankruptcy Mergers Continue reading
Levels of International Strategy
The globalization of the economy, internationalization of businesses and emergence of new markets are all key themes in contemporary business. Whereas international business may once have been the province of organisations with sufficient scale and reach, these types of companies — typically multi-national corporations – no longer have a monopoly on this kind of business. Increasing numbers of firms, of varying scale, are confronted with compelling reasons for expanding their activities across multiple national boundaries. In some cases, such motivation includes the knowledge that success in international markets is a pre-requisite for survival; if competitor organisations succeed in international markets, they may achieve the scale and liquidity which affords them sustainable competitive advantage. There are mainly three levels of international strategy. They are; Corporate Strategy Business Strategy Functional Strategies Short description of these three are given bellow, 1. Corporate Strategy: Corporate strategy attempts to define the domain of businesses the Continue reading
Strategic Inflection Point
A term coined by Andrew Grove, former CEO of Intel to describe a dramatic change in competitive forces. At that time, the leaders must give up the past, see closely how the industry is evolving and find new ways of competing. This point of dramatic change in the industry is known as Strategic Inflection Point. “a strategic inflection point is a time in the life of business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end” Andrew S. Grove, Only the Paranoid Survive. For example, the arrival of containers marked a strategic inflection point in the shipping industry. The introduction of the IBM PC was a strategic inflection point in the computer industry. The emergence of large discount store chains like Walmart and Tesco may well turn out to Continue reading
Relationship of Organizational Structure with Strategy and Culture
Relationship between Business Strategy and Structure Business Strategy primarily refers to the road-map laid out by an organization. The principal objective of strategy is to ensure that an organization achieves the set targets in order to sustain and grow in an increasingly competitive world. On the other hand, a structure is the manner in which the internal resources of a company get connected with each other. More specifically, structure is concerned with different groups that can be formed within an organization. For example, an organization having a functional structure will operate through the different functions such as Marketing, Finance, and Manufacturing. Business Strategy is the main driver that decides the structure an organization. Also, in case the structure of a company is not synchronized with its strategy, then the company may not be able to achieve the set targets. For example, a company with a diversified product portfolio and has Continue reading