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Alok KumarAlok Kumar
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Is strategy a part of MACR? or
Is MACR a part of strategy?
How MACR and business strategy are inter-
connected?
How MACR fit in long-term strategy of a firm?
What is long-term strategy? (tactical vs. strategy)
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Product Life Cycle
Boston Consulting Group Matrix
Ansoff Matrix
Mckinsey Growth Matrix
Michael Porters forces Model
Michael Porters Competitive Advantage
Core Competence
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One of the most critical factor in M&A..
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Economic Motive Behind M&A Strategy
Growth
Synergy
Diversification
Non-Economic Motive Behind M&A Strategy
Hubris Hypothesis (Pride of Managers)
Winners Curse
Improved management
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If NPVM&A NPVnew project, - (New Project
If NPVM&A NPVnew project, - (M&A)
If NPVM&A = NPVnew project, - (Indifferent)
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The most important aspect in any M&A
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2+2 = 5
NAV = VAB [VA +VB] P E
Where,
NAV Net Acquisition Value
VAB the value of combine firm
VA the value of Firm A
VB the value of Firm B
P Premium paid for B
E Expenses of Acquisition
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Revenue Enhancement
Cost Reduction
Economy of Scale
Economy of Scope
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Cost of Capital
Capital Raising Capacity
Tax Benefits
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Too important to ignore
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Vertical Merger
Backward buy your supplier
Forward buy your buyer
Horizontal Merger buy your competitors
Conglomerate
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Never been successful so far..sad but true!
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Hubris Hypothesis arrogance and pride of management
and promoters
Winners Curse the management and promoters think
deal too important to lose it your competitors
Improved Management the acquirer management is
better than the of target.
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In the next class
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Alok Kumar
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Alok Kumar
Mind XpansionP
ortfolioP
rivate Ltd53/4477, RehgarPura
Karol Bagh, New Delhi-110005
E-Mail [email protected]