Defensive Strategies Buspoli

7/29/2019 Defensive Strategies Buspoli

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Occurs when an organization regroups through cost

and asset reduction to reverse declining sales and

profit.

Sometimes called a turn-around or re-organizationalstrategy.

Designed to fortify an organizations basic and

distinctive competence.


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When an organization has clearly distinctive competence

but has failed consistently to meet its objectives and goals

over time.

When the organization is one of the weaker competitors in agiven industry.

When an organization is plagued by inefficiency, low

profitability, poor employee morale, and pressure fromstockholders to improve performance.


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When an organization has failed to capitalize on

external opportunities, minimize external threats, take

advantage of internal strengths, and overcome internal

weaknesses over time; that is, when the organizationsstrategic managers have failed (and possibly will be

replaced by more competent individuals).


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Entails selling off land and buildings to raise

needed cash, pruning product lines, closing

marginal businesses, closing obsolete factories,

automating processes, reducing the number of

employees, and instituting expense control

system.


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Sony sheds 10,000 staff in major reorganization

BBC News, 12 April 2012
http://localhost/var/www/apps/conversion/tmp/Downloads/BBC%20News%20-%20Sony%20sheds%2010,000%20staff%20in%20major%20reorganisation.htmhttp://localhost/var/www/apps/conversion/tmp/Downloads/BBC%20News%20-%20Sony%20sheds%2010,000%20staff%20in%20major%20reorganisation.htm


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Selling a division or part of an organization.

Used to raise capital for further strategic

acquisitions or investments.


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When an organization has pursued a retrenchment strategyand failed to accomplish needed improvements.

When a division needs more resources to be competitive

than the company can provide. When a division is responsible for an organizations overall

poor performance.

When a division is a misfit with the rest of an organization;this can result from radically different markets, customers,

managers, employees, values or needs.


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The company sells one of its divisions to focus

on their core business activities or in other

operations or field.


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Apple and Microsoft group buys Nortel patents

BBC News, 1 July 2011
http://localhost/var/www/apps/conversion/tmp/Downloads/BBC%20News%20-%20Apple%20and%20Microsoft%20group%20buys%20Nortel%20patents.htm


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Shunned Starbucks in Aussie exit

BBC News, 4 August 2008


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Occurs when two or more companies from a

temporary partnership or consortium for the

purpose of capitalizing on some opportunity.

Often, the two or moir sponsoring firms from a

separate organization and have shared equity

ownership in the new entity.


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When a privately owned corporation is forming a joint

venture with a publicly owned organization; there are some

advantages of being privately held such as close ownership;

there are some advantages of being publicly held, such asaccess to stock issuances as a source capital. These

advantages can be synergistically combined in a joint

venture.


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When a domestic organization is forming a joint venture with

a foreign country; joint venture can provide a domestic

company with the opportunity of obtaining local

management in a foreign country. When the distinctive competencies of two or more firms

complement each other especially well.

When two or more smaller firms have trouble competingwith a large firm.

When there exists a need to introduce a new technology

quickly.


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Jointly Controlled Operations:

Involve the use of asset and other resources.

Combine their operations, resources and expertise in order

to manufacture market and distribute jointly a particularproduct.

Jointly Controlled Assets:

Involve the joint control and often the joint ownership of one or

more assets contributed to, or acquired for the purpose of the

joint venture and dedicated to the purpose of joint venture .


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Jointly Controlled Entities:

Establishment of a corporation; partnership or other

entity; there is a contractual arrangement that

establishes joint control over the economic activityof the entity.


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Swedish Match and Philip Morris International announceglobal joint venture

to commercialize smoke-free tobacco products

Swedish Match Press Release, 3 February 2009
http://localhost/var/www/apps/conversion/tmp/Downloads/Press%20release%20%20Swedish%20Match%20and%20Philip%20Morris...%20-%20Swedish%20Match.htm


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termination of the firm.

a process by which a company's existence is

brought to an end. involves giving up management of the firm to

the courts in return for some settlements of the

corporations obligations.


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No one is interested in buying a weak company in an

unattractive industry. (Industry is unattractive and the

company is too weak to be sold as a going concern.)

When a company finds itself in the worst possible

situation with poor competitive position in an industry.

When a corporation sees no hope of being able to

operate successfully or to obtain the necessary creditor

agreement.


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Management may choose to convert as manysaleable assets as possible to cash, which is thendistributed to the shareholders after all obligations.

The liquidator collects the assets of the company(including uncalled capital; that is, amounts unpaidon shares) and pays the creditors in order ofpriority.

The liquidator distributes any surplus funds to theshareholders.


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Defensive Strategies Buspoli

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