Essay about new notes

Submitted By jasw22
Words: 743
Pages: 3

Vertical integration:
How is my position going to limit me in the face of my opponents?
Gucci: positional advantages: the entire industry moving towards fashion. Gucci sees upon that trend.
Good positioning will requires strategy around key resources. Key resources aligned with strategy.
Structuring for success:
Choose position, organize or reorg resources, how to structure supply chain, what you need to own? How to choose what to acquire and what not to acquire?
Cost synergy: Better quality with merger
Can you realize gains without merger?
MS and Intel –

M&A spread over time or clustered at particular point in time. M&A is very spiky.
M&A serves a role in equilibrating industries:
Negative shocks to the market, a “shakeout” (exit and/or consolidation)
Change could be driven by consumer choices or regulations: clustering M&As.

Is M&A really profitable? From empirical, statistical perspective.
Event study: excess share value may be revealing the info. about merger.

Airline Mergers:

Q1. Identify possible gains:
Pros:
Market power: competition. Is there a way the merged entity can add additional revenue? In the airline industry, market overlap, route overlap, based on competitors on that route suggest a greater ability to increase prices.
Outside airlines, jos a bank and men’s warehouse, retailer consolidation: look at cost savings but for market power. How many regions are they competing? What customer segment they are fighting for?
Efficiency / synergy effect: cost savings, operational efficiencies, expanding networks.

Q2. Airways: merger needed?
Routes could be seen as the upside of the merger but airlines already do codesharing.
Why is this industry struggling? Airlines struggling with oil prices and increased international competition.

Google:
Go down the value chain and sell hardware. Control the entire value chain.
Google wanted to go downstream in hope to design better mobile.
Threats within the ecosystem:
Whenever there are markets with complimentars (they can increase the overall value – friends, foes-there’s only certain amount of market share ). Samsung creating Tizen similar to Android, open source platform.
Vertical integration in such a case can help you how the market evolves. It’s not about patents, it’s about the protecting the ecosystem.
Changed market structure changes what your optimal structure should be?
Threats and Leverage: You should have the bargaining power by having additional outside options.
If Samsung spent billions on tizen and never put it on any phone. Does that mean it was accidental, no? This gives them the leverage to negotiate.

Beer:
Market power: will the merger increase prices in the other country?
See class 3 slides for the final project.

Opportunity costs:

People usually think about vertical integration in terms of margin. But the broader way of thinking about it is the need or desire of control your everyday operations that will improve your output.
e.g coke took control