Description
Partnership and strategic alliancing. Covers the concepts related to partnerships and alliances.
PARTNERSHIP AND STRATEGIC ALLIANCING
Customer Relationship Management
Instructor: Dr. Emad Elwy Student: Mohamed Essam
Contents
• • • • Business Relationships Business growth Competency PARTNERSHIP AND STRATEGIC ALLAINCING
– – – – – – – Partnership Strategic alliancing Joint ventures Mergers Acquisitions Licensing Franchising
BUSINESS RELATIONSHIPS
TRADITIONAL RELATIONSHIPS
CONTEMPORARY RELATIONSHIPS
Internal and External Growth Strategies
External Growth Strategies
• • • • • • • Partnership Strategic alliancing Joint ventures Mergers Acquisitions Licensing Franchising
So, is BIGGER better?
The fly outlived the Dinosaur!
So, is BIGGER better?
The fly outlived the Dinosaur!
Responsiveness & flexibility to change
So, is BIGGER better?
“Only 23 percent of companies involved in a merger or acquisition are able to recover the costs of the Merge or the acquisition”- McKinsey
study (2008)
Competency
FIGURE 5- 1000VENTURES.COM
Advantages and Disadvantages of External Growth Strategies
Advantages
• Reducing competition • Vertical or horizontal Integration • Gaining access to new products and
Disadvantages
• Incompatibility of top management • Clash of corporate cultures • Operational problems
markets • Access to technical expertise • Access to an established brand name • Economies of scale • Diversification of business risk
• Increased business complexity
• Loss of organizational flexibility • Antitrust environment
PARTNERSHIP AND STRATEGIC ALLAINCING
1+1=??
Partnership and strategic alliancing
1+1= +3
“Partnership and strategic alliancing leverage the resources, abilities and gifts while getting around the weaknesses”.
Mohamed Essam
PARTNERSHIP & STRATEGIC ALLIANCING
FIGURE Potential Partnership Participants Dr. Syed M. Ahmed, Ph.D. College of Engineering & Computing Florida International University, Miami, Florida
PARTNERSHIP “A partnership is an arrangement where parties agree to cooperate to advance their mutual interests”. - (1000ventures, 2010)
“Our success has really been based on partnerships from the very beginning.” Bill Gates
(American Entrepreneur and Founder of Microsoft Co., b.1980)
1
Strategic Alliance
"A strategic alliance is a partnership between firms whereby resources, capabilities, and core competences are blended to follow mutual interests”. - (Answers.com, 1996)
2/3
Joint ventures
“Two or more "parent" financial gatherings accept to share capital, technical knowledge, human supplies, and threats and compensates in a formation of a new entity under divided control”. - (1000ventures, 2010)
"If you do not seek out allies and helpers, then you will be isolated and weak.“ Sun Tzu, "The Art of War"
Mergers
“A merger occurs when the net assets of two or more cooperatives merge into one surviving cooperative. Mergers usually involve horizontal growth”. - (Institute of Mergers,
Acquisitions and Alliances, 2008)
Acquisition - Takeover • “In business, an Acquisition or a takeover is the purchase of one company (the target) by another (the acquirer, or bidder)”. - Investopedia.com
4
Nestlé’s Acquisition Strategy
All acquisitions are measured against a list of key criteria for Nestlé
? Possible transition into Nutrition, Health and Wellness ? To be category No. 1 or strong No. 2 ? Strong brands in leadership positions
? Focused approach on value-added growth categories
? Enhancing RIG (Real internal growth), cash flow and earnings ? Generate value for shareholders ? Maintain strong credit ratings and financial flexibility ? High degree of certainty of successful integration
x
In-
About half of Nestlé’s billionaire brands come from acquisitions
Acquired in 1996 Acquired in 2002
Acquired in 1988 JV with Coke Acquired in 1998
Acquired in 2002
JV with L'Oréal Acquired in 1985
Acquired in 2007
Acquired in 2002
Acquired in 2004
Acquired in 1985
Acquired in 1977
Acquired in 1986
Acquired in 1973
Acquired in 1988
“An alliance with a powerful person is never safe.” Phaedrus (Roman fabuliste, 15-50 B.C.)
21
WATERS’ BUSINESS IN EGYPT MARKETSHARE
Schweppes 4%
Hayat 5%
Aqua 5%
Siwa 3% Safi 1%
Nahl 1% Aquafina 26% Dasani 25%
Baraka Baraka 12% + Nestle Nestle 30 % 18%
Mergers & Acquisitions
Top 10 M&A deals worldwide by value (in mil. USD) from 2000 to 2010
Rank Year 1 Purchaser Fusion: America Online 2000 Inc. (AOL) Purchased Time Warner SmithKline Beecham Plc. Shell Transport & Trading Co
Transaction value (in mil. USD)
164,747
2
3 4 5 6
2000 Glaxo Wellcome Plc. Royal Dutch Petroleum 2004 Co.
2006 AT&T Inc.
75,961
74,559 72,671 72,041 68,000
BellSouth Corporation AT&T Broadband & 2001 Comcast Corporation Internet Svcs 2009 Pfizer Inc. Wyeth Spin-off: Nortel 2000 Networks Corporation 2002 2004 2008 Pfizer Inc. Pharmacia Corporation JP Morgan Chase & Co Banc One Corp Anheuser-Busch Inbev Inc. Companies, Inc
TABLE INSTITUTE OF MERGERS, ACQUISITIONS AND ALLIANCES
7
8 9 10
59,974
59,515 58,761 52,000
Licensing “The granting of permission to use intellectual property rights, such as trademarks, patents, or technology, under defined conditions. Licensing, in the business world, is a contractual agreement to use a brand name, patent or property that is owned by another business entity ”. (investorwords.com, 2009)
.
Franchising “A business arrangement which permits for the reputation, (goodwill) breakthrough, scientific experience and technology of the innovator (franchisor) to be blended with the energy, industry and finance of another party (franchisee) to conduct the commerce of supplying and selling of products and services”. - (Wipo.int, 2011)
5
Thank You
Bibliography
• • • • • • 1000ventures. (2010). Joint Venture. Retrieved October 8, 2011, fromhttp://www.1000ventures.com/business_guide/jv_main.html 1000ventures.com. (2011). Strategic Alliances "Why and How To Build Them". Retrieved Oct 8, 2011, fromhttp://www.1000ventures.com/business_guide/strategic_alliances_main.html Answers.com. (1996). strategic-alliance. Retrieved Oct 2011, fromhttp://www.answers.com/topic/strategic-alliance chaurasiya, K. (2010). advantages and disadvantages of acquisition. Retrieved 2011, from businessofaccouting.com:http://businessofaccouting.blogspot.com/2010/04/advantages-and-disadvantages-of.html Cheryl Munson, eHow Contributor. (2011). Definition-licensing-franchising. Retrieved Oct 2011, fromhttp://www.ehow.com/about_6068927_definition-licensing-franchising.html Evancarmichael.com. (2011). Franchising--Licensing---What-exactly-are-they--and-why-are-more-and-more-people-looking-at-this-option. Retrieved Oct 2011, fromhttp://www.evancarmichael.com/Brand...e-and-more-people-looking-at-this-option.html Hoffman, I. (2007). strategic. Retrieved October 8, 2011, fromhttp://www.ivanhoffman.com/strategic.html Institute of Mergers, Acquisitions and Alliances. (2008). statistics-mergers-acquisitions. Retrieved Oct 17, 2011, fromhttp://www.imaainstitute.org/statistics-mergers-acquisitions.html#TopMergersAcquisitions_Worldwide Investopedia.com. (2010). Merger. Retrieved Oct 17, 2011, fromhttp://www.investopedia.com/terms/m/merger.asp#ixzz1b25GYRMl investorwords.com. (2009). licensing. Retrieved Oct 9, 2011, fromhttp://www.investorwords.com/2799/licensing.html#ixzz1b2P5Mohe Lenin. (2009, Nov 19). Partnership and Types of Partnerships. Retrieved Oct 8, 2011, fromhttp://www.indiastudychannel.com/resources/95609-Partnership-Types-Partnerships.aspx MBASkool. (2011, April 17). mergers-vs-strategic-alliances-vs-joint-ventures-the-difference. Retrieved October 10, 2011, fromhttp://www.mbaskool.com/business-ar...liances-vs-joint-ventures-the-difference.html Piperpat.com. (2009). advantages of a franchise. Retrieved Oct 2011, fromhttp://www.piperpat.com/IPManagement/Franchising/tabid/251/Default.aspx Rahulmbaguy. (2009). distribution-channel. Retrieved Oct 2011, fromhttp://www.slideshare.net/Rahulmbaguy/distribution-channel2066149 Scribd.com. (1996). Strategic-Alliance. Retrieved Oct 2011, fromhttp://www.scribd.com/doc/38964984/Strategic-Alliance Wikipedia. (2011, October 6). Partnership. Retrieved Oct 8, 2011, fromhttp://en.wikipedia.org/wiki/Partnership Wikipedia. (2011, Aug 24). Strategic alliance. Retrieved Oct 8, 2011, fromhttp://en.wikipedia.org/wiki/Strategic_Alliance Wipo.int. (2011). Franchising & Licensing - What are they? and how can you benefit from them? Retrieved Oct 9, 2011, fromhttp://www.wipo.int/sme/en/documents/franchising.htm#what WN.com. (2011). License. Retrieved Oct 2011, fromhttp://wn.com/License
• • • • • • •
•
• • • • • •
doc_128516562.pptx
Partnership and strategic alliancing. Covers the concepts related to partnerships and alliances.
PARTNERSHIP AND STRATEGIC ALLIANCING
Customer Relationship Management
Instructor: Dr. Emad Elwy Student: Mohamed Essam
Contents
• • • • Business Relationships Business growth Competency PARTNERSHIP AND STRATEGIC ALLAINCING
– – – – – – – Partnership Strategic alliancing Joint ventures Mergers Acquisitions Licensing Franchising
BUSINESS RELATIONSHIPS
TRADITIONAL RELATIONSHIPS
CONTEMPORARY RELATIONSHIPS
Internal and External Growth Strategies
External Growth Strategies
• • • • • • • Partnership Strategic alliancing Joint ventures Mergers Acquisitions Licensing Franchising
So, is BIGGER better?
The fly outlived the Dinosaur!
So, is BIGGER better?
The fly outlived the Dinosaur!
Responsiveness & flexibility to change
So, is BIGGER better?
“Only 23 percent of companies involved in a merger or acquisition are able to recover the costs of the Merge or the acquisition”- McKinsey
study (2008)
Competency
FIGURE 5- 1000VENTURES.COM
Advantages and Disadvantages of External Growth Strategies
Advantages
• Reducing competition • Vertical or horizontal Integration • Gaining access to new products and
Disadvantages
• Incompatibility of top management • Clash of corporate cultures • Operational problems
markets • Access to technical expertise • Access to an established brand name • Economies of scale • Diversification of business risk
• Increased business complexity
• Loss of organizational flexibility • Antitrust environment
PARTNERSHIP AND STRATEGIC ALLAINCING
1+1=??
Partnership and strategic alliancing
1+1= +3
“Partnership and strategic alliancing leverage the resources, abilities and gifts while getting around the weaknesses”.
Mohamed Essam
PARTNERSHIP & STRATEGIC ALLIANCING
FIGURE Potential Partnership Participants Dr. Syed M. Ahmed, Ph.D. College of Engineering & Computing Florida International University, Miami, Florida
PARTNERSHIP “A partnership is an arrangement where parties agree to cooperate to advance their mutual interests”. - (1000ventures, 2010)
“Our success has really been based on partnerships from the very beginning.” Bill Gates
(American Entrepreneur and Founder of Microsoft Co., b.1980)
1
Strategic Alliance
"A strategic alliance is a partnership between firms whereby resources, capabilities, and core competences are blended to follow mutual interests”. - (Answers.com, 1996)
2/3
Joint ventures
“Two or more "parent" financial gatherings accept to share capital, technical knowledge, human supplies, and threats and compensates in a formation of a new entity under divided control”. - (1000ventures, 2010)
"If you do not seek out allies and helpers, then you will be isolated and weak.“ Sun Tzu, "The Art of War"
Mergers
“A merger occurs when the net assets of two or more cooperatives merge into one surviving cooperative. Mergers usually involve horizontal growth”. - (Institute of Mergers,
Acquisitions and Alliances, 2008)
Acquisition - Takeover • “In business, an Acquisition or a takeover is the purchase of one company (the target) by another (the acquirer, or bidder)”. - Investopedia.com
4
Nestlé’s Acquisition Strategy
All acquisitions are measured against a list of key criteria for Nestlé
? Possible transition into Nutrition, Health and Wellness ? To be category No. 1 or strong No. 2 ? Strong brands in leadership positions
? Focused approach on value-added growth categories
? Enhancing RIG (Real internal growth), cash flow and earnings ? Generate value for shareholders ? Maintain strong credit ratings and financial flexibility ? High degree of certainty of successful integration
x
In-
About half of Nestlé’s billionaire brands come from acquisitions
Acquired in 1996 Acquired in 2002
Acquired in 1988 JV with Coke Acquired in 1998
Acquired in 2002
JV with L'Oréal Acquired in 1985
Acquired in 2007
Acquired in 2002
Acquired in 2004
Acquired in 1985
Acquired in 1977
Acquired in 1986
Acquired in 1973
Acquired in 1988
“An alliance with a powerful person is never safe.” Phaedrus (Roman fabuliste, 15-50 B.C.)
21
WATERS’ BUSINESS IN EGYPT MARKETSHARE
Schweppes 4%
Hayat 5%
Aqua 5%
Siwa 3% Safi 1%
Nahl 1% Aquafina 26% Dasani 25%
Baraka Baraka 12% + Nestle Nestle 30 % 18%
Mergers & Acquisitions
Top 10 M&A deals worldwide by value (in mil. USD) from 2000 to 2010
Rank Year 1 Purchaser Fusion: America Online 2000 Inc. (AOL) Purchased Time Warner SmithKline Beecham Plc. Shell Transport & Trading Co
Transaction value (in mil. USD)
164,747
2
3 4 5 6
2000 Glaxo Wellcome Plc. Royal Dutch Petroleum 2004 Co.
2006 AT&T Inc.
75,961
74,559 72,671 72,041 68,000
BellSouth Corporation AT&T Broadband & 2001 Comcast Corporation Internet Svcs 2009 Pfizer Inc. Wyeth Spin-off: Nortel 2000 Networks Corporation 2002 2004 2008 Pfizer Inc. Pharmacia Corporation JP Morgan Chase & Co Banc One Corp Anheuser-Busch Inbev Inc. Companies, Inc
TABLE INSTITUTE OF MERGERS, ACQUISITIONS AND ALLIANCES
7
8 9 10
59,974
59,515 58,761 52,000
Licensing “The granting of permission to use intellectual property rights, such as trademarks, patents, or technology, under defined conditions. Licensing, in the business world, is a contractual agreement to use a brand name, patent or property that is owned by another business entity ”. (investorwords.com, 2009)
.
Franchising “A business arrangement which permits for the reputation, (goodwill) breakthrough, scientific experience and technology of the innovator (franchisor) to be blended with the energy, industry and finance of another party (franchisee) to conduct the commerce of supplying and selling of products and services”. - (Wipo.int, 2011)
5
Thank You
Bibliography
• • • • • • 1000ventures. (2010). Joint Venture. Retrieved October 8, 2011, fromhttp://www.1000ventures.com/business_guide/jv_main.html 1000ventures.com. (2011). Strategic Alliances "Why and How To Build Them". Retrieved Oct 8, 2011, fromhttp://www.1000ventures.com/business_guide/strategic_alliances_main.html Answers.com. (1996). strategic-alliance. Retrieved Oct 2011, fromhttp://www.answers.com/topic/strategic-alliance chaurasiya, K. (2010). advantages and disadvantages of acquisition. Retrieved 2011, from businessofaccouting.com:http://businessofaccouting.blogspot.com/2010/04/advantages-and-disadvantages-of.html Cheryl Munson, eHow Contributor. (2011). Definition-licensing-franchising. Retrieved Oct 2011, fromhttp://www.ehow.com/about_6068927_definition-licensing-franchising.html Evancarmichael.com. (2011). Franchising--Licensing---What-exactly-are-they--and-why-are-more-and-more-people-looking-at-this-option. Retrieved Oct 2011, fromhttp://www.evancarmichael.com/Brand...e-and-more-people-looking-at-this-option.html Hoffman, I. (2007). strategic. Retrieved October 8, 2011, fromhttp://www.ivanhoffman.com/strategic.html Institute of Mergers, Acquisitions and Alliances. (2008). statistics-mergers-acquisitions. Retrieved Oct 17, 2011, fromhttp://www.imaainstitute.org/statistics-mergers-acquisitions.html#TopMergersAcquisitions_Worldwide Investopedia.com. (2010). Merger. Retrieved Oct 17, 2011, fromhttp://www.investopedia.com/terms/m/merger.asp#ixzz1b25GYRMl investorwords.com. (2009). licensing. Retrieved Oct 9, 2011, fromhttp://www.investorwords.com/2799/licensing.html#ixzz1b2P5Mohe Lenin. (2009, Nov 19). Partnership and Types of Partnerships. Retrieved Oct 8, 2011, fromhttp://www.indiastudychannel.com/resources/95609-Partnership-Types-Partnerships.aspx MBASkool. (2011, April 17). mergers-vs-strategic-alliances-vs-joint-ventures-the-difference. Retrieved October 10, 2011, fromhttp://www.mbaskool.com/business-ar...liances-vs-joint-ventures-the-difference.html Piperpat.com. (2009). advantages of a franchise. Retrieved Oct 2011, fromhttp://www.piperpat.com/IPManagement/Franchising/tabid/251/Default.aspx Rahulmbaguy. (2009). distribution-channel. Retrieved Oct 2011, fromhttp://www.slideshare.net/Rahulmbaguy/distribution-channel2066149 Scribd.com. (1996). Strategic-Alliance. Retrieved Oct 2011, fromhttp://www.scribd.com/doc/38964984/Strategic-Alliance Wikipedia. (2011, October 6). Partnership. Retrieved Oct 8, 2011, fromhttp://en.wikipedia.org/wiki/Partnership Wikipedia. (2011, Aug 24). Strategic alliance. Retrieved Oct 8, 2011, fromhttp://en.wikipedia.org/wiki/Strategic_Alliance Wipo.int. (2011). Franchising & Licensing - What are they? and how can you benefit from them? Retrieved Oct 9, 2011, fromhttp://www.wipo.int/sme/en/documents/franchising.htm#what WN.com. (2011). License. Retrieved Oct 2011, fromhttp://wn.com/License
• • • • • • •
•
• • • • • •
doc_128516562.pptx