Chapter 6. Supplementing the Chosen Competitive Strategy. Strategic Alliances Joint Ventures Vertical Integration Outsourcing Mergers & Acquisitions. Cooperative Strategies.
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Supplementing the Chosen Competitive Strategy
Geo Storm was actually manufactured by Isuzu. The Storm is the Isuzu Impulse.
Geo Prizm = Toyota Corolla
Geo Tracker = Suzuki Sidekick
Geo Metro = Suzuki Esteem or Swift w/hatchback
No Geo cars were actually made by General Motors. They were all imported from foreign manufacturers.
Operating in more than one stage of the industry value chain
Reasons of Acquisitions
Invest in New Industry or
Problems with Acquisitions
Integration of two firms
Overestimation of Synergy
Managerial energy absorption
Become too large
Substitute for innovation
30 - 40% average acquisition premium
Acquiring firm’s value drops 4% in the 3 months following acquisitions
30 - 50% of acquisitions are later divested
Acquirers underperform S&P by 14%, peers by 4%
3 month performance before and after
Often, for personal reasons
Firm size and executive compensation are related
When do executives loss their jobs?