ACQUISITIONS AND RESTRUCTURING COMPARATIVE CHART
Universidad Autónoma de Nuevo León
Facultad De Ciencias Políticas y Administración Pública
Edgar Dante Mendoza Luna
Administration
Bachelor’s Degree in Political Science and Public Administration
Alma Nataly Valdez Estrella
1717241
Thursday 25 of September, 2014. Monterrey, Nuevo León
Grupo B01
Acquisition
Restructuring
Strategy through which one firm buys a controlling, or 100 percent, interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio.
Strategy through which a firm changes its set of businesses or its financial structure.
Reasons for Acquisition:
Increased market power
Overcoming entry barriers
Cost of new product development and increased speed to market
Lower risk to developing new products
Increased diversification
Reshaping the firm’s competitive scope
Learning and developing new capabilities
Reasons for Restructuring:
Changed Nature of Business
Downsizing
New work methods
New management methods
Quality management
Technology
Finance related issues
Increased Market Power
Market Power exists when a firm is able to sell its goods or services above competitive levels or when the cost of its primary or support activities are lower than those of its competitors.
Restructuring Strategies:
Downsizing
Down scoping
Leveraged buyouts.
Cost of New Product Development and Increased Speed to Market
Acquisitions provide more predictable returns as well as faster market entry
Downsizing
Reduction in the number of a firm’s employees and, sometimes, in the number of its operating units.
Downsizing is often a part of acquisitions that fail to create the value anticipated when the transaction was completed.
Lower Risk Compared to Developing New Products: The outcomes of an acquisition can be estimated more easily and accurately than the outcomes of an internal product development process, mangers view acquisitions as being less risky.
Problem in failed downsizing
Failing to downsize appropriately may
Facultad De Ciencias Políticas y Administración Pública
Edgar Dante Mendoza Luna
Administration
Bachelor’s Degree in Political Science and Public Administration
Alma Nataly Valdez Estrella
1717241
Thursday 25 of September, 2014. Monterrey, Nuevo León
Grupo B01
Acquisition
Restructuring
Strategy through which one firm buys a controlling, or 100 percent, interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio.
Strategy through which a firm changes its set of businesses or its financial structure.
Reasons for Acquisition:
Increased market power
Overcoming entry barriers
Cost of new product development and increased speed to market
Lower risk to developing new products
Increased diversification
Reshaping the firm’s competitive scope
Learning and developing new capabilities
Reasons for Restructuring:
Changed Nature of Business
Downsizing
New work methods
New management methods
Quality management
Technology
Finance related issues
Increased Market Power
Market Power exists when a firm is able to sell its goods or services above competitive levels or when the cost of its primary or support activities are lower than those of its competitors.
Restructuring Strategies:
Downsizing
Down scoping
Leveraged buyouts.
Cost of New Product Development and Increased Speed to Market
Acquisitions provide more predictable returns as well as faster market entry
Downsizing
Reduction in the number of a firm’s employees and, sometimes, in the number of its operating units.
Downsizing is often a part of acquisitions that fail to create the value anticipated when the transaction was completed.
Lower Risk Compared to Developing New Products: The outcomes of an acquisition can be estimated more easily and accurately than the outcomes of an internal product development process, mangers view acquisitions as being less risky.
Problem in failed downsizing
Failing to downsize appropriately may