Critical Thinking in a Business Decision
How would you describe your company's competitive situation prior to the acquisition?
My company Genaflek Marketing has done really well in years past and would have still been profitable, but I felt we weren’t giving our long term Clients everything possible for their business. We provided a great service but it lacked a major component, social media. With the rapid growth of the social media market our clients were missing out on an opportunity to grow their business though social media. We need to stay ahead of the times and without this merger we would have been starting a path to decreasing success. When you were faced with this situation, what did you see as the most important facts that
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This was wrong of me and I wish I had realized sooner what we were all missing out on. This could be a lesson to any business owner who has operated the same way for too long. There is always room for growth. What alternative approaches did you consider, and how did you assess the advantages and disadvantages of each?
Outside of assuming we had everything we needed Genaflek Marketing did consider hiring a consultant to help introduce our company to new marketing strategies and analytics. Although this would’ve helped guide us in the right direction I felt it wouldn’t be enough. We did not have enough background in this area for the customers to truly reap the benefits of social media and the opportunities that come of this strategy. How did you present the decision to sell to your board of directors?
The best way for the board to see why this merger would be beneficial was to explain what our customers deserve. Once I explained what our loyal customers were missing out on it was clear to the board that in order to maintain business at the level we have for so many years there needed to be major change. All in all, everyone was excited for the change and Regina welcomed us will open
According to the researchers the increased value results from an opportunity to utilize a specialized resources which arises solely as a result of the merger (Jensens & Ruback, 1983; Bradle, Desai and Kim , 1983). For creating operational and financial synergies managers believe that two enterprises will be worth more if merged than if operates as two separate entities. Thus, the two companies, A and B:
Market price per share: should be bigger or equal after the merger, which often is not the case.
There are certain benefits that derived from the merger, which would also boost the operations and financial performance of the organization.
A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate
As manager of Stanley Black & Decker estimated, it was expected to save $350 million annually over three years if those above synergy would actually work in practice. The company can get cost saving in distribution network consolidation, materials spending, transportation cost and management. These, of course, were no sure thing; achieving them depended entirely on management making them happen. The manager might face the lots of cost synergies risk in operation after merger. First of all, because of different manufacturing modal and distribution channel, the cost of consolidation in reality may be cost much than estimate or the consolidation consequence is not very perfect due to both original companies had already established a maturity product line in long history. Secondly, although the merger would bring huge economic scale advantage and marketing gains to new combined firm, the Stanley Black & Decker has to face other fierce competitions in this industries and even the alliance of other competition in term of purchasing materials and sales in order to against the merger of Stanley Works and Black & Decker. What’s more, as we can see in the Exhibit 1, the business and regional consolidation
They broke the most basic rule in business "Never let your personal feelings interfere with your business "A customer may not always be right but, they are still a customer"
Abernethy and Chapman are desirable because they have a steady clientele and continue to generate revenues leaving them with a net income that is favorable. Often companies will merge with another company in an effort to avoid bankruptcy, consolidate services, or expand. Over the years, we’ve seen many big-name firms merge with others. Acquisitions and mergers are becoming a trend due to the number of partner retirements and the lack of succession plans. (Sinkin and Putney, 2013) Firms such as Abernethy and Chapman might agree to an acquisition because it is often the most cost-effective way for them to increase cash flow and continue to be successful. Mergers can either be a success or a failure. When you merge organizations, you are also merging personalities which can often lead to conflict; however, merging the different levels of expertise could be beneficial to a firm. Ultimately, I believe that merging firms will create
My job was to play a role of CEO for Starshine (SS). I had the option to either merge with Bel Vino (BV) or to be acquired by International Beverage (IB). A merger between SS and BV will benefit both companies. For SS, the potential sources of value added that would occur through a merger with BV are increase in domestic revenue by $30 to $35 million per year, opportunities for savings in the marketing costs of $5 to $8 million and finally reduction in SG&A (Selling, General and Administrative expenses) by about $500,000 per year. For BV, the potential sources of value added that would occur through a merger with SS are increase in domestic revenue by $25 million to $50 million per year and reduce Bel Vino’s sales force by 35 positions which in return they save $4.5 to $6 million per year.
In addition, improvement in operation efficiency is foreseeable. The merger would eliminate overlapping corporate functions such as information system management, inventory management and etc. Also, the improvements in procurement and reductions in SKU would also create savings. In total, we estimate those effects would save 575M.
An answer for the issue would be training of the Genaflek advisors. A mentor/educator for social media can come on site. This would be exorbitant; however over the long haul this would give RPZ Marketing leeway. The organization would not just have the long haul security of Genaflek specialists, yet will have all advisors in the organization ready to give the customers the marketing they ask.
There are many companies and organizations that work in a similar manner and in a similar industry. Given the opportunity, merging alike organizations could lead to a prosperous economic effect. Without mergers many of the most well known brands and companies won’t be where they are today.
When companies combine/merge the whole objective is to gain new opportunities, gain market share, grow the business, to become more innovative and to improve product offerings, utilizing/sharing the existing resources and data. From the case
Post-merger integration work is difficult, political, and often driven by teams that still have day jobs. Budgets are undefined, executive leadership is not clear beyond the C-level, no plans exist, and no one has done it before. Companies are willing to spend money on due diligence ahead of signing the papers, but do not always follow through to ensure that targets are met. In many cases, integration team members are plucked from the “operate and maintain” staff, and either cannot see or do not share the strategic vision of the “design and build” dealmakers. Companies that thrive from mergers do eight things (at least) correctly: Have a Plan, Communicate, and Measure Results, Dedicate the Team, Automate, Plan for Turnover, Focus on Business
All the techniques assisted in following the decision making steps including measuring the impact which is easily forgotten. It is very important to ensure our decision was effective and if it was not. Understanding why the decision was not effective and re evaluating the alternatives and the issues that come into play will help us identify what was missed or overlooked so the problem can get fixed. This also helps ensure the same mistakes are minimized, if not identified so the same issues do not reoccur and something can be learned for the future.
Reckitt Benckiser is a British global consumer goods company, making and marketing home, health and personal care products. Headquartered in Slough, near London, UK, it has operations in over 60 countries, including 42 manufacturing facilities, and sales in nearly 200countries. RB is ranked 6th in the 2008 European Business Week 50, the magazine's annual ranking of the best performing companies within the S&P European 350.The company's strategy is to have a highly focused portfolio concentrating on its 17 most profitable brands, which were