Strategic alliances acquisitions psu mgmt 510
This presentation is the property of its rightful owner.
Sponsored Links
1 / 17

Strategic Alliances & Acquisitions PSU MGMT 510 PowerPoint PPT Presentation


  • 118 Views
  • Uploaded on
  • Presentation posted in: General

Strategic Alliances & Acquisitions PSU MGMT 510. Dave Garten [email protected] Week # 1. Dave Garten – Background Highlights. Current Faculty, PSU/OEMBA – Strategy, M&A, Negotiation, Biz Projects Consulting: management, strategy, alliances, M&A

Download Presentation

Strategic Alliances & Acquisitions PSU MGMT 510

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Strategic alliances acquisitions psu mgmt 510

Strategic Alliances & Acquisitions PSU MGMT 510

Dave Garten

[email protected]

Week # 1


Dave garten background highlights

Dave Garten – Background Highlights

  • Current

    • Faculty, PSU/OEMBA – Strategy, M&A, Negotiation, Biz Projects

    • Consulting: management, strategy, alliances, M&A

    • Board(s): Organically Grown Company, SeQuential, Bridlemile Soccer, Forest Park Conservancy

  • CEO, SeQuential Biofuels, Inc.

  • Intel – 15 year career

    • General Manager

    • Director of Business Development. >200+ alliances

    • Marketing and product management

  • Engineer early-on – designed fuel injection

  • Education: MBA M.I.T 1987; BS/MS Engineering

Dave Garten – Business Strategy


Syllabus course topics

Syllabus Course Topics

  • Alliance Phases

  • Planning

  • Deal making

  • Execution

  • Integration

  • Focus Topics

  • Valuation

  • Antitrust

  • Negotiation

  • Due diligence

  • Ecosystems

  • Alliance Structures

  • Acquisitions

  • Divestitures

  • Spin-outs

  • Vertical alliances

  • Licensing

  • Joint ventures

  • Outsourcing

  • Equity

Dave Garten PSU MGMT 510


Strategy gaps

?

Strategy Gaps

“Basis of Competition”

External Analysis

Gap Planning

“What we need”

Make

Buy

Ally

R & D

Supply

Mftg

Sales

Mktg

Strategy

Mission

Internal Analysis

“What we have”

Dave Garten PSU MGMT 510


Alliance phases

Planning

Deal-Making

Execution

Integration

Adjust

Alliance Phases

  • Strategy

  • Screening

  • Analysis

  • Negotiation

  • Deal Structure

  • Due diligence

Launch

  • Perform

  • Manage

  • Assess

  • Expand

  • Exit

Unwind/separate

Dave Garten PSU MGMT 510


Alliance growth drivers

Alliance Growth Drivers

  • Growth of Alliance Use – need to engage others

  • Driven by the gap in what a company would like to achieve vs. what it can achieve

  • Pace of change in technology

  • Globalization of markets

  • Product complexity increasing.

Dave Garten PSU MGMT 510

X


Data alliance types

100%

75%

Non-competitors

Competitive Rivalry

50%

25%

Competitors

0%

Computers & Communication

Financial

Airlines

Auto

Health

Care

Energy

Consumer

Other

Proportions of Alliances by Industry

Data: Alliance Types

Source: Booze, Allen, Hamilton analysis of 2000 alliances 1995-6

Dave Garten PSU MGMT 510


Data global reach a significant factor

Data: Global Reach a Significant Factor

Dave Garten PSU MGMT 510


Data success failure

Data: Success & Failure

  • Lots of studies -> indicators at best…

  • Success: ~30% acquisitions; ~ 50% alliances

  • Tend to be more successful

    • Acquisitions in core businesses, existing geographies

    • Alliances for related businesses, new geographies

    • Alliances between strong companies

    • Acquisitions between large and small companies [45%]

    • Alliances that evolve beyond initial objectives [79%]

    • JVs with even split of ownership [60%]

    • LBO & corporate buyers [~80%]

Source: various including Bleeke and Ernst, McKinsey

Dave Garten PSU MGMT 510


M a success failure

M&A Success & Failure

  • Top 5 reasons for M&A Failure

  • Top 3 Ways to Beat the Odds…

Dave Garten PSU MGMT 510

X


Alliance success failure

Alliance Success & Failure

Source: Vantage Partners

“an alliance is like a foreign body that has been grafted onto separate organizations. To keep it alive you have to guard against rejection by each one” – Jordan D. Lewis, Trusted Partners

Dave Garten PSU MGMT 510

X


Industry structure

Industry Structure

Forward

Integration

  • Customers

  • Distribution

Unrelated

Diversification

Related

Horizontal

  • Consolidation

  • New product, same customer

  • Same product, new customer

  • Conglomerate

Vertical

Backward

Integration

  • Supply chain

  • Manufacturing

  • Natural resources

Dave Garten PSU MGMT 510


Industry structure1

Industry Structure

Mature

  • Quality & reliability

Declining

  • Price

Growth

  • service

Emerging

  • Features

Late

Majority

Early

Majority

Early

Adopters

Laggards

Innovators

Growth strategies

Consolidation

Dave Garten PSU MGMT 510


Structure types

Structure Types

Outsourcing

Purchase

Agreement

Acquisition

Joint

Venture

Joint

Development

Multiyear

Purchase

Agreement

Commitment

Licensing

Purchase

Order

Joint

Marketing

“Strategic”

“Transactional”

Ownership

Dave Garten PSU MGMT 510


Structure propensities

Acquisition

Alliance

Types of synergies

“Modular”

Airline & hotel

“Sequential”

Biotech-pharma

“Reciprocal”

Mobile-Exxon

Lower

Higher

Degree of Uncertainty

Nature of Resources

value of “soft” to “hard”

Lower

Higher

Lower

Higher

Degree of Competition

for resources

Structure Propensities

Source: adapted from When to Ally and When to Acquire

Dave Garten PSU MGMT 510


Value drivers synergies

Value Drivers (Synergies)

  • Underlying purpose of strategic actions

    • Links strategic intent to day-to-day operations

  • Ultimately->Effect on earnings & cash flow

  • Examples

    • Increase revenue (growth)

      • Sell a solution, add new products or customers, increase market share, more sales force coverage

    • Reduce costs (consolidation)

      • Lower unit costs (economies of scale), lower capital costs or taxes, consolidate facilities, reduce redundancies

Dave Garten PSU MGMT 510


Value drivers synergies1

Increasing risk

Value Drivers (Synergies)

New products through new channels

Low

Existing products through new channels

New products through existing channels

Probability of Success

Facilities shared

Operating activities shared

Functions

Duplicated

High

Short

Time Frame

Long

Derived from: When to Walk Away from a Deal

Dave Garten PSU MGMT 510


  • Login