Assignment

Group Strategy Project (Part 3): Firm Analysis

Week 7 Group Strategy Assignment

A. General Instructions

1. Only use scholarly and reliable non-scholarly sources such as Bloomberg, Reuters, Money, Forbes, and Fortune (no answer.com, QuickMBA, eHow, Wikipedia…….), in addition to the weekly readings, multimedia and data resources listed in the classroom.

1. Assignment should be written in a paper format; not a question and answer format.

1. An Executive Summary and half page Introduction should be included. Also, a Conclusion should be included at the end of the report.

1. There are no page restrictions, however, paper should be with one inch margins, 12 point font, double-spacing, and should be posted as a PDF document. All graphics should be placed in the appendix.

1. Use APA format for in-text citations and the reference list.

1. Have 1 Group member post your Week 7 Group Strategy Project (Part 3) paper in the Assignment Folder.

B. Week 7 Overview & Deliverables

Identify a short list of potential target companies (at least two) for acquisition or as joint venture partners in the country you have selected for the project and provide a rationale for considering each one, and select one to be the target based upon your analysis. Provide reasons for your decision based upon your research and on the various assigned readings/multimedia so far this semester or from prior semesters (properly cite these). Specify whether this will be an acquisition or joint venture and your reasons why.

The first sentence of your Executive Summary should read as follows:

“Team _____________ recommends that _______________, a major multinational company in the ______________industry, target ___________ as the first country, through an acquisition (or joint venture with) ___________, one of the key local companies in the ___________industry.

The following is the outline for your Week 7 paper. 

VI. Determination of the Target Company for Acquisition or Joint Venture

1. Short list and profile potential company candidates and provide comparative benefits to your client company.

2. Selection of the Target Company for Acquisition or Joint Venture.

3. Description of the target company and its fit with strategic objectives of Client Company. Use comparative analysis of the potential companies in terms of strategic fit with your client. What is the structure of your partnership: joint venture/acquisition?

4. Suggest operational roles and activities of the partners of the new venture. What will your client firm and target firm each be responsible for in terms of the new venture? Break this into strategic responsibilities and operating responsibilities. How will these responsibilities be broken out? (Sandra)

Use the following models to analyze the benefits of the acquisition:

• Internal resources: Competitive advantage rationale / Value chain rationale / Resource Based View of the firm rationale. In other words, focus on the skills transfer potential between the two firms. How will the two firms strengthen each other as a result of their partnership?

• Shared resources: Vertical integration rationale / Horizontal integration rationale. How will efficiency be increased as a result of the combined operation?

• Financial rationale: Consider the deal from a financial point of view and effects on rate of return and debt load for example. Note: Acquisitions in the past have focused on the first two issues but ignored this dimension and incurred huge debts to make the deal only to find the financial aspects undermined or negated the strategic benefits.

Finally, add this phase to your previous work from Weeks 5 and 6 to produce one term paper which includes the following:

1. Company Characteristics and Analysis. Identification of a client company and a description of its characteristics and strategic needs and intent. Why is making a foreign diversification move necessary in terms of its strategy and performance effects? (Week 5)

2. Industry Characteristics and Analysis. Profile of the client firm’s industry indicating the Critical Success Factors in the industry and how these relate to the decision to diversify abroad. (Week 5 Phase)

3. Country Characteristics and Analysis. Conclusions of your analysis of attractive countries to fulfill your strategic intent. What specific country are you recommending and why? (Week 6 Phase)

4. Investment Partner/ Target Firm Analysis. Discussion of your choice of an investment partner. (Week 7 Phase)

5. Summary of your recommendations.

Reading

• Schmitz, A. (Trans.). 2012. Selecting corporate-level strategies.

• Kte’pi, B. (2009). Acquisitions, takeovers, and mergers. In C. Wankel (Ed.), Encyclopedia of business in today’s world (pp. 18-22). Thousand Oaks: CA: SAGE Publications Ltd. Doi: 10.4135/9781412964289.n12

• Dyer, J.H., Kale, P., & Singh, H. (2001). How to make strategic alliances work. MIT Sloan Management Review, 42(4), 37-43. (UMUC Library)

MBA Reference Guides

• Foreign market entry modes

• Vertical integration

• Mark, R.M., & Bishop, W.V. (2007). The flexibility of RAROC: The many values of a risk-adjusted return on capital approach. Teradata Magazine, (pp. 1-2).