Preview

Havells Case

Good Essays
Open Document
Open Document
307 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Havells Case
1. Does the proposed acquisition make sense for Havells? Why or why not?

Ans: The proposed acquisition makes sense for the following reasons: ❖ The acquisition of Sylvania will give Havells access to the wide marketing networks of SLI. It will serve as a good channel for marketing Havell’s products in Europe ❖ Access to the R&D and engineering capabilities of SLI ❖ Ownership of various brands of Sylvania: Sylvania, Zenith, Linolite, Claude, Concord and Marlin ❖ Exposure to lighting and lighting fixtures segment, as Sylvania was primarily engaged in this segment whereas Havells had a small presence in the lighting market.

2. What are the major risks associated with this acquisition? Can these be managed?

Ans: Major Risks associated with the acquisition are-

Strategic risk is the current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions, or lack of responsiveness to industry changes.
There is a risk that the acquisition fails to bring out the desired synergy

Operational risk is, as the name suggests, a risk arising from execution of a company's business functions. It is a very broad concept which focuses on the risks arising from the people, systems and processes through which a company operates.
There is a huge difference in the culture of the two companies which presents a challenge of the integration of the European executives in the Indian team. y Financial risk is an umbrella term for any risk associated with any form of financing. Risk may be taken as downside risk, the difference between the actual return and the expected return (when the actual return is less), or the uncertainty of that return.
The acquisition deal of Sylvania was expected to cost more than $200 million, which is a huge amount for Havells. Also there is uncertainty about the returns from the

You May Also Find These Documents Helpful

  • Better Essays

    Fin 516 Mini Case

    • 1678 Words
    • 7 Pages

    Within business, there will always be operational risks to consider. "Operating risk is the basic…

    • 1678 Words
    • 7 Pages
    Better Essays
  • Better Essays

    Haverwood Case Analysis

    • 1007 Words
    • 4 Pages

    In 2008, Haverwood Furniture and Lea-Meadows Inc. merged into one company. The issue at hand involves merging the selling efforts of the two companies. They both go about selling their products differently and the best plan of action is uncertain. John Bott, of Haverwood, believes that Haverwood sales representatives implement the best selling strategy whereas Martin Moorman, the national sales manager at Lea-Meadows believes that they have the superior strategy.…

    • 1007 Words
    • 4 Pages
    Better Essays
  • Satisfactory Essays

    Fin370 Week Definitions

    • 487 Words
    • 2 Pages

    * The possibility that shareholders will lose money while invested with a company. A risk has big weight in any decision not just in finance. Risk is the chance that one may lose money or assets.…

    • 487 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Fin 370

    • 461 Words
    • 3 Pages

    Finance is the study of how people and businesses evaluate investments and raise capital to fund them.…

    • 461 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Risk: When a corporation or individual analyze whether or not an investment will yield them a loss.…

    • 423 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    study questions 4

    • 429 Words
    • 2 Pages

    2. What is financial risk? (0.5 points) the possibility that shareholders will lose money when they invest in a company that has debt.…

    • 429 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    In April 2008 Haverwood Furniture merged with Lea-Meadows, a manufacturer of upholstered furniture for living and family rooms. The merger was not planned in any conventional sense. The merger proceeded smoothly since the two firms were located on adjacent locations and the two companies would maintain as much autonomy as was economically justified. The only real issue that still remained was merging the selling efforts. The question was straight-forward “do we give the upholstery line of chairs and sofas to our sales force, or do we continue using the sales agents?” Haverwood’s vice president said the line should be given to his sales group, but Lea-Meadows said the upholstery line should remain with sales agents.…

    • 855 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Hrm/531 Week 9

    • 525 Words
    • 3 Pages

    After reading chapter nine about strategic management I have found out that it is a key component of an organization. Many objectives have to be kept in mind when implementing strategic management such as understanding that both planning and designing a strategy involves a great amount of risk and resource assessment, the ways to counter the risks, and obtain effective utilization of resources all while trying to achieve a significant purpose. Organizations are normally established with a goal in mind, which defines the purpose for its existence. All of the work carried out by the organization revolves around this particular goal, and it has to align its internal resources and external environment in a way that the goal is achieved in rational expected time. Strategic Management on a corporate level normally incorporates…

    • 525 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Energy Trading Assignment

    • 670 Words
    • 3 Pages

    Credit risk: The risk of loss of principal or loss of a financial reward stemming from a borrower's failure to repay a loan or otherwise meet a contractual obligation.…

    • 670 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Manage Risk

    • 7591 Words
    • 24 Pages

    2.Finance: The probability that an actual return on an investment will be lower than the expected return. Financial risk is divided into the following categories: Basic risk, Capital risk, Country risk, Default risk, Delivery risk, Economic risk, Exchange rate risk, Interest rate risk, Liquidity risk, Operations risk, Payment system risk, Political risk, Refinancing risk, Reinvestment risk, Settlement risk, Sovereign risk, and Underwriting risk.…

    • 7591 Words
    • 24 Pages
    Powerful Essays
  • Best Essays

    The manufacturer like Merck-Medco, Lilly-PCS were concerned about losing access to their industries to PBM. PBMs are companies that administer drug benefit programs for employers and health insurance carriers. Their contracts are directly to managed care organizations, self-insured employers, insurance companies, Medicare, and almost all Federal and State government health benefits plans. To make the benefit plan more affordable PBM lowered their claims processing fees and also offered rebate retention. PBM also processed prescription drug claims, reviewed prescriptions, offered generic and branded medicines through mail services as well. Hence, due to PBM’s efficiency of delivering and processing the drug cut overall cost of health care benefits, the manufacturer industry got a big hit in their business. So, in the early 1990S, a large growth of managed care changed the health care industry that also had a heavy impact on…

    • 2738 Words
    • 11 Pages
    Best Essays
  • Better Essays

    Risk is the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome). The notion implies that a choice having an influence on the outcome exists (or existed). Potential losses themselves may also be called "risks". Almost any human endeavor carries some risk, but some are much more risky than others.…

    • 1077 Words
    • 5 Pages
    Better Essays
  • Powerful Essays

    Havells needs to plan for an acquisition to diversify their operations geographically and through their product offerings. SLI, whose primary operations are in Europe and Latin America, would provide this geographic diversification. For SLI, as their competitive landscape increased, their management is also looking expanding its geographic reach. As well, Havells’ business is predominantly in electrical control gears with a small presence in lighting. The acquisition of SLI, whose product offering is primarily in lighting and lighting fixtures will give provide Havells product diversification. As Havells currently has a small presence in lighting, the acquisition of SLI could bear fruit to positive synergies if these operations are combined successfully. SLI’s wide marketing network is perceived as a good channel for marketing Havells’ products in Europe (page 8). Combining the two companies R&D knowledge could bolster innovative products for both segments. These possibilities of synergy and the need for…

    • 1775 Words
    • 8 Pages
    Powerful Essays
  • Satisfactory Essays

    Haier case

    • 535 Words
    • 2 Pages

    Product innovation is Haier’s competitive advantage, which combined with supply chain innovation. Based on different customer’s lifestyle, Haier focus on product differentiation, which produced hundreds of unique products across Haier’s strategic model with low-end, value, and high-end brands. Such competitive advantage is created by supply chain innovation. Haier cooperate with suppliers into product design. It uses modularization to speed up the design process and to facilitate the manufacturing process. And instead of partnership with number of suppliers, Haier just works with two suppliers to concentrate on quality. The order winner for Haier is that corporate strategy is focus from R&D to after-sales service and support. Product differentiation is designed to satisfy customer with variety expectations. After –sales customer service provides maintenance and repair service for customer’s support.…

    • 535 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    OVERVIEW The quantification of operational risk forms an important component of the operational risk management framework, although the modelling of operational risk is challenged by the broad nature of…

    • 1638 Words
    • 7 Pages
    Good Essays