Franchising & Advantages
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Franchising is similar to licensing. The main difference is that the latter is
used primarily by manufacturing firms while the former is normally pursued
by service companies. In this type of arrangement, the franchisee pays a
fee for using the brand name of the franchise and agrees to strictly follow
the standards and abide by the rules set by the franchise
- The main drawback of a franchising strategy is that the firm totally
depends on others for quality control
Shareholder and stakeholder perspectives
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, - Shareholders provide capital and assume risk, they need to be out first
> they can do their own "corporate social responsibility"
- No corporation can do well without the support of customers, employee,
suppliers, regulators etc.
> taking care of the broader stakeholder groups will trickle down to
shareholders
Economies of scale (and scope)
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Cost leadership (Buy competitor, larger firm; walmart and jet.com)
Make boards better
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Maximum control: independent, all outside board members
- More formal processes to evaluate the board's performance
- Adopting a "lead director" role
Maximum level of firm specific knowledge: all inside board members
(duality)
- Quick decision making
Board as a resource
- CEOs in similar and complementary industries (connections, advice)
- More diversity in the backgrounds of board members (academics)
Merger
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two firms agree to integrate their operations on a relatively co-equal basis
ex:
at&t and time warner
JP morgan chase
Board of director problems
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-Too quick to approve managers' self-serving initiatives
• Rubber-stamping decisions
- Are exploited by managers
-Are not vigilant enough in hiring and monitoring CEO behavior
-May not have enough insight into firm operations to weigh in on major
strategic decisions
Power Distance
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the extent to which individuals expect a hierarchical structure that
emphasizes status differences between subordinates and superiors
Problems in achieving acquisition success
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- Integration difficulties
- Inadequate target evaluation
- Too large
- Managers overly focused on acquisitions
- Too much diversification
- Inability to achieve synergy
- Extraordinary debt
Key challenges in international management
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1.Political Risks and Sovereignty
2.Economic Risks
3.Weak Infrastructures in Some Areas
4.Differences in Legal Systems
5.Cultural Differences
6. Ethical/Normative Concerns
Joint Ventures & advantages/disadvantages
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A joint venture is an arrangement whereby two or more independent firms
agree to establish a separate firm that is owned by the participating
companies
- The foreign firm benefits by establishing a working relationship with a
domestic firm that is familiar with local conditions such as the labor market,
political environment, competitive landscape, tastes and preferences,
cultural norms, language, legal systems and the like
Give this one a try later!
Franchising is similar to licensing. The main difference is that the latter is
used primarily by manufacturing firms while the former is normally pursued
by service companies. In this type of arrangement, the franchisee pays a
fee for using the brand name of the franchise and agrees to strictly follow
the standards and abide by the rules set by the franchise
- The main drawback of a franchising strategy is that the firm totally
depends on others for quality control
Shareholder and stakeholder perspectives
Give this one a try later!
, - Shareholders provide capital and assume risk, they need to be out first
> they can do their own "corporate social responsibility"
- No corporation can do well without the support of customers, employee,
suppliers, regulators etc.
> taking care of the broader stakeholder groups will trickle down to
shareholders
Economies of scale (and scope)
Give this one a try later!
Cost leadership (Buy competitor, larger firm; walmart and jet.com)
Make boards better
Give this one a try later!
Maximum control: independent, all outside board members
- More formal processes to evaluate the board's performance
- Adopting a "lead director" role
Maximum level of firm specific knowledge: all inside board members
(duality)
- Quick decision making
Board as a resource
- CEOs in similar and complementary industries (connections, advice)
- More diversity in the backgrounds of board members (academics)
Merger
,Give this one a try later!
two firms agree to integrate their operations on a relatively co-equal basis
ex:
at&t and time warner
JP morgan chase
Board of director problems
Give this one a try later!
-Too quick to approve managers' self-serving initiatives
• Rubber-stamping decisions
- Are exploited by managers
-Are not vigilant enough in hiring and monitoring CEO behavior
-May not have enough insight into firm operations to weigh in on major
strategic decisions
Power Distance
Give this one a try later!
the extent to which individuals expect a hierarchical structure that
emphasizes status differences between subordinates and superiors
Problems in achieving acquisition success
, Give this one a try later!
- Integration difficulties
- Inadequate target evaluation
- Too large
- Managers overly focused on acquisitions
- Too much diversification
- Inability to achieve synergy
- Extraordinary debt
Key challenges in international management
Give this one a try later!
1.Political Risks and Sovereignty
2.Economic Risks
3.Weak Infrastructures in Some Areas
4.Differences in Legal Systems
5.Cultural Differences
6. Ethical/Normative Concerns
Joint Ventures & advantages/disadvantages
Give this one a try later!
A joint venture is an arrangement whereby two or more independent firms
agree to establish a separate firm that is owned by the participating
companies
- The foreign firm benefits by establishing a working relationship with a
domestic firm that is familiar with local conditions such as the labor market,
political environment, competitive landscape, tastes and preferences,
cultural norms, language, legal systems and the like
