Académique Documents
Professionnel Documents
Culture Documents
Srinivas Gunta
Assistant Professor
Strategic Management
Discussion questions
Partnerships
Why enter partnerships?
Successful alliance?
Reasons for alliance?
Changes in the reasons?
Who is controlling whom?
Is Fuji Xerox better off alone?
HP-Compaq ArcelorMittal
Characterized as merger Characterized as takeover
Post-event name: HP Post-event name?
Target smaller than acquirer Target larger than acquirer
Compaq: #2 in PCs in USA Arcelor: Global #1 in Steel
Deal offer: $24 billion Deal offer: $32.4 bn. (2006;
(2002) Original offer of $23.3 bn.)
US firm taking over another Dutch firm taking over
US firm Luxembourgese firm
HP-Compaq ArcelorMittal
Opposition within the board Geo-political opposition
and from substantial (France, Spain); Bid from
number of shareholders Russian firm Severstal
Fortune Global 500 2011: Fortune Global 500 2011:
28th, $126 bn., $8.76 bn.; 74th, $83 bn., $2.92 bn.
Revenues higher than IBM
(2011)
Strategic group 2
Strategic group 3
My interpretation of Nohria & Garcia-Pont (1991) Global Strategic Linkages and Industry Structure Strategic Management Journal, 12(S1): 105-124
Bilateral Alliances
Bilateral Alliances
M&A
Unilateral Alliances
Internal R&D Embodied Acquisition
Bilateral Alliances
M&A Unilateral Alliances
Internal R&D Embodied Acquisition
Low
(Market) Embodied Technology
Unilateral Alliances
Acquisition
Low High
TECHNOLOGY FAMILIARITY
Srinivas Gunta
Assistant Professor
Strategic Management
Why have alternate paths?
Why is an
international division
preferred initially?
Who calls shots in
different models?
Why did Grid not
work as prescriptive
model?
Headquarters orientation
Ethnocentric
Polycentric
Geocentric
Multinational
What is achieved?
What orientation?
What sort of control?
What about synergies?
International
What is achieved?
What orientation?
Who calls the shots?
What was the relation
Fuji Xerox had with
(Rank) Xerox in the
early 1970s?
No scope for
interaction
amongst the
subsidiaries
Anatomy
Formal structure and responsibilities
Physiology
Interpersonal relationships and processes
Psychology
Individual attitudes and mentalities
Heard of Chandler?
To implement a strategy, you need a structure
Structure follows Strategy
What would happen when you need to
change strategy?
Strategy follows Structure
Why? What does that imply?
OR
Srinivas Gunta
Assistant Professor
Strategic Management
Why is internationalization tough?
Distance matters!
CAGE distance Pankaj Ghemawat
Cultural
Administrative
Geographic
Economic
Is growth important?
Is globalization necessary?
How did Tatas prior international forays fare?
1600.0
1400.0
1200.0
Tata Motors
1000.0
Indian Hotels
TCS
800.0
Tata Steel
Tata Tea
600.0
Sensex/10
400.0
200.0
0.0
Sep-99
Feb-00
Jul-00
Dec-00
Sep-04
Feb-05
Jul-05
Dec-05
Nov-98
Nov-03
Aug-97
Jan-98
Jun-98
Apr-99
May-01
Mar-02
Aug-02
Jan-03
Mar-07
Aug-07
Oct-01
Jun-03
Apr-04
May-06
Oct-06
400.0
350.0
300.0
Tata Motors
250.0
Indian Hotels
TCS
200.0
Tata Steel
Tata Tea
150.0
Sensex
100.0
50.0
0.0
Sep-99
Feb-00
Jul-00
Dec-00
Sep-04
Feb-05
Jul-05
Dec-05
Nov-98
Nov-03
Aug-97
Jan-98
Jun-98
Apr-99
May-01
Mar-02
Aug-02
Jan-03
Mar-07
Aug-07
Oct-01
Jun-03
Apr-04
May-06
Srinivas Gunta PGP 2011-12 Strategic Management II Oct-06
Tata Sons Shareholding Structure (% held)
90
80
70
60
50
40
30
20
10
0
Tata Tata TCS Tata Indian
Motor Steel Tea Hotels
Srinivas Gunta PGP 2011-12 Strategic Management II
2003-07: Major Tata Co.s Performance
100
80
Ashok
60 Leyland
40 Maruti
20
0
Debt/equity
Srinivas Gunta PGP 2011-12 Strategic Management II
Tata Steel vis--vis peers: 2007 D/E
180
Tata Arcelor Mittal
160
140
120 Nippon
100 SAIL
80
60
40
20
0
Srinivas Gunta 1st Qtr
PGP 2011-12 Strategic Management II
Tata Tea vis--vis peers: 2007 D/E
250 Tata
200
150
HUL
100
Nestle
50
0
Srinivas Gunta PGP 2011-12 Strategic Management II
Indian Hotels vis--vis peers: 2007 D/E
100 Indian Hotels
90 Shangri-La Asia
80
70 Hongkong & Shanghai
60
50
40
30
20
10
0
Srinivas Gunta PGP 2011-12 Strategic Management II
What are Tatas up to?
Srinivas Gunta
Assistant Professor
Strategic Management
Competitive Advantage
Is competitive advantage inherited or
created ?
How far does home environment go in
contributing towards creating and sustaining
competitive advantage ?
Universally companies achieve competitive
advantage through acts of innovation in
adopting new technologies and by new ways
of doing things. Agree?
At National Level
Labor cost
Interest rates
Exchange rates
Economies of scale
Customer
Company
Competition
Currency
Country
IT and beauty
Roll number:__
1. Take an industry where India is competitive (e.g.
S/w services, Pharma, Textiles, Gems & Jewellery,
Auto components) and analyze it with respect to
the four determinants in Porters diamond. (12
marks)
18
Value (in U.S. billion $)
16
14
12
10
8
6
4
2
0
91 93 95 97 99 01 03 05
19 19 19 19 19 20 20 20
IT Gems & Jewellery Readymade garments
Year
Srinivas Gunta PGP 2011-12 Strategic Management II
The Top 8 Indian S/w Exporters
Yr.\Rank 1 2 3 4 5 6 7 8
1980-81 TCS TUL Computronics Shaw Wallace Hinditron Indicos ORG
1985-86 TCS TUL PCS Hindistron Infosys Datamatics DCM DP COSL
1989-90 TCS TUL COSL Datamatics TI Digital PCS M-BT
1993-94 TCS TUL HCS HP Digital ICIM Wipro Pemtafour Patni
1994-95 TCS TUL Wipro Pentafour Infosys Silverline Fujitsu Digital
1996-97 TCS Wipro NIIT Pentafour Infosys
1997-98 TCS Wipro Tata Infotech Pentafour Infosys Satyam Tata IBM CMC
1999-00 TCS Wipro Infosys HCL Satyam NIIT
2000-01 TCS Infosys Wipro Satyam HCL Patni