Agenda Marketing & Finance EIN

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Presentation transcript:

Agenda Marketing & Finance EIN Block 2 November 12th: Guest lecture & Set-up / X-ray November 26th: Strategic fit? December 3rd: Making alliances work!

ALLIANCES AND ACQUISITIONS How do firms choose between alliances and acquisitions? Alliances - create value by combining complementary resources - more suitable under high levels of uncertainty Acquisitions - derive most value by eliminating redundant resources - preferable when the level of uncertainty is low Source: Global business, chapter 11

MOTIVES FOR ACQUISITIONS (1) synergistic - response to formal institutional constraints and transitions in search of synergy (2) hubris - manager’s overconfidence in his or her capabilities - may unknowingly overpay for targets (3) managerial motives - self-interested reasons – some managers may have deliberately over diversified their firms through M&As in their quest for more power, prestige, and money

Assignment during class What makes your alliance work?