1. Accessing Resources for Growth from External Sources

2. Franchising
“An arrangement whereby the manufacturer or sole distributor of a trademarked product or service gives exclusive rights of local distribution to independent retailers in return for their payment of royalties and conformance of standardized operating procedures.”

3. Franchising Franchisee Benefits Product Acceptance
Managerial Expertise
Capital Requirements
Money saving features
Knowledge of the Market
Operating & Structural Controls
Standardized suppliers

4. Franchising Franchisor Benefits Disadvantages Expansion risk
Cost Advantage
Disadvantages
Franchisee v. Franchisor
Failure or Selling
Franchisor disadvantages

5. Franchising Types Trends Dealership
Cars
Name, image, method of doing business
Subway, McDonald’s
Services
Trends
Good health
Time saving or convenience
Environmental consciousness
Second Baby Boom

6. Investing in a Franchise
Entrepreneurial Commitment
Factors
Proven v. unproven
Financial stability
Potential market
Profit potential
Collect Information
FTC’s Franchise Rule
Compare costs
Contact

7. Joint Ventures Definition Types Factors of Success
Private-sector companies
Cooperative research
Industry-university agreements
Two problems
International joint ventures
Factors of Success
How to best manage entity re: ensuing relationships
Degree of symmetry
Expectation of results
Timing must be right

8. Acquisitions Considerations Advantages Established business Location
Established market structure
Cost
Existing employees
More opportunity to be creative

9. Acquisitions Disadvantages Synergy Structuring the Deal
Marginal success record
Overconfidence in ability
Key employee loss
Overevaluated
Synergy
Structuring the Deal
Direct Purchase
Bootstrap Purchase
Locating Acquisition Candidates

10. Mergers Department of Justice How does it take place? Requirements
Determining value

12. Leveraged Buyouts Definition Why buy? Financing Steps before buying
Debt-to-equity ratio
Steps before buying
Is asking price reasonable?
Assess firm’s debt capacity
Develop appropriate financial package

13. Overcoming Constraints by Negotiating
Two tasks
Distribution task
Divide up the pie
Integration task
Make the pie larger

14. Negotiating What will you do if no agreement is reached?
Reservation Price
What will the other party do if no agreement is reached?
Bargaining zone

15. Negotiating
What are underlying issues for you? How important is each issue?
Trade-offs
What are underlying issues for other party? How important is each issue?
Understanding=Increased integration

16. Negotiating Strategy Build Trust and Share Information
Best outcome
Can it hurt the negotiations?
Ask Lots of Questions
Probe for preferences
Make Multiple Offer Simultaneously
Show what’s important based on choices
Used to Create Trade-offs that Result in Mutually Beneficial Outcomes