Every company in an industry is in a unique situation determined by its history and current competitive strategy. For smaller organisations within an industry dominated by one or two large companies, the actions of the major companies will often produce new and significant problems for their smaller competitors. The information requirements for the smaller companies may involve establishing a new market niche, getting out of a product line completely, or redistributing resources among various product lines. Their strategy is mainly reaction to the larger companies’ strategies, but is important in any business in any market. Imagine only three (3) points are to be rolled out in the first phase.
That’s when instead of creating a business, most entrepreneurs merely create a job for themselves. They have achieved the satisfaction that comes along with their own businesses, only to find that this freedom has its price: Daily attendance is mandatory in order for the business to succeed and be profitable. In a sense, rather than creating their own business these entrepreneurs have instead created their own jobs, with all of the responsibilities that go along with it. The second challenge successful entrepreneurs’ face is that while they have developed the business skills they need to grow their business; very few of them have cultivated the personal wealth skills they need to build their wealth independent of their business. This is extremely shortsighted and risky.
The most common word used in the transaction of merging or acquiring companies is ‘synergy’. This explains how two companies combine their core business activities so as to increase an overall performance and at the same time reducing their transaction costs. The main reason as to why companies merge or are taken over is mostly based on financial purposes. Often, firms are unable to perform to a required or to their desiring
Single business: 95% or more of the revenue comes from a single business. Dominant business: Between 70% and 95% of revenue comes from a single business. * Moderate and high levels of diversification: A firm generating more than 30% of its revenues outside a dominant business and whose business are related to each other in some manner uses a related diversification corporate level strategy. When the links between the diversified firms’ business are rather direct, a related constrained diversification strategy is being used. A highly diversified firm that has no relationship between its businesses follows an unrelated diversification strategy.
The term ‘business’ is used to cover organisations as diverse as multinational companies and small local businesses, as well as organisations in the voluntary sector. Businesses have a wide range of purposes. Some supply goods and services, others manufacture goods. Some want to make profits to satisfy their shareholders, others do not. Businesses contribute to the national wellbeing and the unit considers the purposes of these different businesses.
2. Decentralized structure - Decentralized structure relies on a team environment at different levels of business. This type of structure have several individuals responsible for making business decisions and running the business. Nucor’s top managers always believed that their highly decentralized and lean structure was necessary to meet foreign needs in the market. Though that involved the risk that lower levels of management would follow short term goals at the expense of long-term corporate objectives and co-ordination.
Since PacifiCorp is not a publicly traded company, we must use valuation multiples from comparable firms to determine the value of the firm. As you can see in Exhibit 1, if we use the valuation multiples we arrive at an implied firm value of between $6,252 million (low end) and $9,289 million (high end). This means that our offer of $9.4 billion is right in line with the high end valuation of the company. We also used multiples to determine that the market value of equity was worth between $4,277 million and $5,904 million (see Exhibit 1). As stated earlier, we offered to pay $5.1 billion for the equity portion of the company.
Multinational enterprises like Alcan are often built from the joining of diverse enterprises, each operating as its own entity. The business of acquisition depends on deriving value or profits from each entity, so instituting change is left to others after the mergers and acquisitions people move on to the next target. The IT function was ignored, with responses to new legislation (such as Sarbanes-Oxley in the United States) seemingly the only impetus for change. Alcan management had ignored the importance of an IT strategy, as evidenced by the Corporate IT Director position being vacant for almost a year when this case study started. The current structure is functional, and does provide Alcan management with information, so there are positives to start with.
This is what Porcini does through its differentiation strategies. Porcini’s greatest problem was the near saturation of market outlets. With this it had to seek options of national expansion as it could not compete with the big players with huge resources and brand name. Tom Alessio’s Porcini’s Vice President strategically convinced management at Porcini’s to consider opening outlets which will have limited food on the menu(Porcini pronto) to serve travelers who travel from one state to another. Despite the desire to expand and value creation through quality difference, Porcini was aware of the challenges it will face.
In my opinion, success is definitely not something that comes easily; one must pursue their goals with the utmost fierceness in order to achieve it. I believe it as something that is accomplished by building your way up and by achieving each pursuit over a certain period of time. It could take an individual from a couple of hours to many years in order to become successful, depending on the mentality of said individual. I think that in order for one to accomplish a goal, they would have to clear their minor goals first, which then lead to their main aspirations. For instance, if a manager of a large company worked their way up the corporate ladder through sacrifice and hard work, they would be defined a success compared to those who had an insider to piggy-back them to the top, which is what I consider unsuccessful or a “hollow Success”.