Growth through mergers and diversification represents a very good alternative to be taken into account in business planning. The external growth contributes to opportunities for effective alignment to the firm’s changing environments. The primary reason for acquiring or merging with another business is to produce improved cash flow or to reduce the risk faster or at a lower cost than achieving the same goal internally. Thus, the goal of any acquisition is to create a strategic advantage by paying a price for the target that is lower than the total resources required for internal development of a similar strategic position. Another reason is the expectation on the part of the diversifying or acquiring firm that it has or will have Continue reading
Business Strategies
Equity Carve-Out (ECO)
An Equity Carve-Out (ECO) is a partial public offering of a wholly owned subsidiary. Unlike spin-offs, ECOs generate a capital infusion because the parent offers shares in the subsidiary to the public through an Initial Public Offering (IPO), although it usually retains a controlling interest in the subsidiary. Like spin-offs, ECOs have become increasingly popular in the last several years. An equity carve-out involves conversion of an existing division or unit into a wholly owned subsidiary. A part of the stake in this subsidiary is sold to outsiders. The parent company may or may not retain controlling stake in the new entity. The shares of the subsidiary are listed and traded separately on the stock exchange. Equity carve-outs result in Continue reading
Case Study: Sony’s Business Strategy and It’s Failure
Sony is the combination of two word sonus and sonny. The both words sonus and sonny is a latin word. The literal meaning of sonus is sound and, sonic and sonny is little son. Easy to pronounce and read in any language, the name Sony, which has a lively ring to it, fits comfortably with the spirit of freedom and open-mindedness. Since, Sony is the combination of two word “sonus” and “sonny”, represents a very small group of young people who have the energy and passion towards unlimited creations and innovative ideas. Sony foundation was started in 1946 when Masaru Ibuka and Akio Morita worked together with a small team of obsessive and committed group of employees build “Tokyo Tsushin Continue reading
Strategic Human Resource Management Process
Human resource management (HRM) is that part of management process which makes, enhances, manages and develops the human element of the enterprise measuring their resourcefulness in terms of talents, abilities, total skills, creative, knowledge, and potentialities for effectively contributing to the organizational objectives. Human resources are precious and a source of competitive advantage. Human resources may be tapped most effective by mutually standard policies which promote promise and foster an inclination in employees to act flexibly in the interests of the adaptive organization’s pursuit of excellence. Human resource policies can be joined with planned business and used to reinforce appropriate culture. Human resources play a critical role in enabling the organization to effectively deal with the external environment challenges. The Continue reading
History and Background of Oracle
Larry Ellison, Bob Miller, and Ed Oats founded Software Development Laboratories (SDL) in 1977. SDL was founded to implement a commercial version of Relational Database Management System (RDBMS). Inspiration to implement RDBMS system came from the 1970 paper on RDBMS authored by Edgor Codd named “A Relational Data for Large Shared Data Banks”. In 1977 SDL implemented first commercial version of RDBMS for CIA. The code name for the project was Oracle. The unique product that the company offered was increasingly recognized in the market and company changed its name to Oracle Systems Corporation to identify itself with its flagship product Oracle. Oracle decided that it would use SQL to retrieve data from database because founders understood that IBM’s SQL Continue reading
Case Study of KFC: Establishment of a Successful Global Business Model
By mid 1950s, fast food franchising was still in its infancy when  Harland Sanders began his cross-country travels to market  “Colonel Sanders’ Recipe Kentucky Fried Chicken.” He had  developed a secret chicken recipe with eleven herbs and spices.  By 1963, the number of KFC franchises had crossed 300. Colonel  Sanders, at 74 years of age was tired of running the daily operations  and sold the business in 1964 to two Louisville businessmen —  Jack Massey and John Young Brown, Jr. — for $2 million. Brown, who later became the governor of Kentucky, was named president,  and Massey was named chairman. Colonel Sanders stayed in a  public relations capacity. In 1966, Massey and Brown made KFC public, and the company was Continue reading