AMBA670 | International Business in Business - University of Maryland
4. Suggest
operational roles and activities of the partners of the new venture. What will your client firm and target firm each be responsiblefor in terms of the new venture? Break this into strategic responsibilities and operating responsibilities. How will these responsibilities be broken out? Use the following models to analyze the benefits of the
acquisition:
- Internal
resources: Competitive advantage rationale / Value chain rationale / Resource Based View of the firm rationale. In other words, focus on the skills transfer potential between the two firms. How will the two firms strengthen each other as a result of their partnership?
- Shared
resources: Vertical integration rationale / Horizontal integration rationale. How will efficiency be increased as a result of the combined operation?
- Financial
rationale: Consider the deal from a financial point of view and effects on rate of return and debt load for example. Note: Acquisitions in the past have focused on the first two issues but ignored this dimension and incurred huge debts to make the deal only to find the financial aspects undermined or negated the strategic benefits. Finally, add this phase to your previous work from Weeks 5