16th Week Journal

Learning Journal Week 16

1.In your own words and using referenced quotes describe the difference between organic growth, merger & acquisition and strategic alliance.

Organic Growth

"Organic growth represents the true growth for the core of the company. It is a good indicator of how well management has used its internal resources to expand profits. Organic growth also identifies whether managers have used their skills to improve the business." – Investopedia

Organic growth can be stated as the expansion of the firm operations with the effort of internal resource of the firm without collaboration.

Merger

"The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock." – Investopedia

Merger is generally combination of two companies which forms a single company where new company has its new market strategy and new share in the market.

  

Acquisition

"A corporate action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisitions are often made as part of a company's growth strategy whereby it is more beneficial to take over an existing firm's operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company's stock or a combination of both." Investopedia

 Acquisition referred as the when one company is taken over by another company where taken over company has been implemented the strategy as per other company. But the acquired company still remains independent company in the market.

   

Strategic Alliance

 “An arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project. A strategic alliance is less involved and less permanent than a joint venture, in which two companies typically pool resources to create a separate business entity.” Investopedia

Strategic Alliance is referred as the mutual agreement between two or more firms work together toward common objectives of aims.

2.Give an example of a company that has grown through a) organic growth, b) merger or acquisition and c) strategic alliance

Organic growth example: P & G (Procter & Gamble Co)

Merger example:  America Online and Time Warner formed AOL Time Warner, and Sony and Ericsson

Acquisition example:  Google Acquired Android, and  IBM Acquired SPSS

Strategic Alliance example:  Philips and BenQ , and Siemens and Huawei Technologies

3.Briefly discuss the merger between Britvic and AG Barr. What advice would you give to the new Board?

Merger between Britvic and AG Barr

The two giant companies of UK merging together and becomes the biggest company with 1.4 billion pound, Britvic and AG Barr in the beverage industry.  There are many positiveness and negativeness in the merger of the two companies. The advice to the new board are:-

·         Development of new product with the taste of consumer requirement.

·         Promotion of the company after merger.

·         Effective communication and team work is needed.

·         Both specialized on the each filed.

·         Market research needed in the new company.

Investopedia, Strategic Alliance. (Online) Available at: < http://www.investopedia.com/terms/s/strategicalliance.asp> [Accessed on 12th March 2013]

East west alliance. Some Examples of Relevant Strategic Alliances. Online) Available at: < http://www.ew-alliances.com/RecentAlliances.pdf> [Accessed on 12th March 2013]

Houghton Mifflin Harcourt Publishing Company; 2010 . Organic growth business definition. (Online) Available at :< http://business.yourdictionary.com/organic-growth > [Accessed on 12^th March 2013]

Investopedia, Organic Growth. (Online) Available at: < http://www.investopedia.com/terms/o/organicgrowth.asp > [Accessed on 12^th March 2013]

Investopedia, Acquisition. (Online) Available at: < http://www.investopedia.com/terms/a/acquisition.asp> [Accessed on 12th March 2013]

Yarow, Jay., 2011. The Dumbest Acquisitions In The History Of Tech. (Online) Available at: < http://www.businessinsider.com/bad-acquisitions-2011-8?op=1> [Accessed on 12th March 2013]

Investopedia, Merger. (Online) Available at: < http://www.investopedia.com/terms/m/merger.asp> [Accessed on 12^th March 2013]

Reybern , Stan., 2010.  The 12 Biggest Mergers in American History. (Online) Available at: < http://www.billshrink.com/blog/6834/the-12-biggest-mergers-in-american-history/> [Accessed on 12^th March 2013]