New Business Developement
Wirtschaftsingenieur HSLU
Wirtschaftsingenieur HSLU
Set of flashcards Details
| Flashcards | 33 |
|---|---|
| Language | English |
| Category | Micro-Economics |
| Level | University |
| Created / Updated | 18.06.2022 / 18.06.2022 |
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What is the path dependency theory saying?
Path dependencies describes the dynamics of self-reinforcing mechanism, which are likely to lead an organization into a lock-in. (NBD vs. Entrepreneurship)
Whats the definition of new business developement?
New Business Development is:
- The capability to create and implement new business
- Executed by existing organizations
- With the goal to increase and/or secure performance
What is creative destruction?
According to Schumpeter, the "gale of creative destruction" describes the "process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one"
What is a technology leap frogging?
this means the deliberate omission of certain technological development stages. This trend can be seen in Africa, where there is still no continuous power grid, but large parts of the population already have a smart phone.
What are disruptive Technologies?
Disruptive technologies are innovations that replace the winning streak of an existing technology, product or service, or drive it out of the market entirely, rendering obsolete the investments of previously dominant market players. (e.g first car – horse)
What is the Incubationphase of a start-up?
Incubate ideas in hope of building out a business model and company, independent, sometimes connected to venture capital firms or funds, stimulating innovation, 6-36 months.
Idea Generation
Seed Stage
half growth stage
What is the Acceleration phase of a start-up?
accelerate growth of an existing company, 3-12 months
Growth Stage
Acceleration Stage
What are Macro Trends?
A macrotrend is a pervasive and persistent shift in the direction of some phenomenon on a global level. Examples of current macro trends include urbanization, automation and changing demographics.
What is Absorptive Capacity?
Absorptive capacity is the ability to recognize the value of new information, assimilate it, and apply it to commercial ends.
Three PROPERTIES that define Absorpitive capacity in a organizational design
1. Ability to recognizing its value and acquire external knowledge (often based; not invented here)
2. Ability to assimilate new knowledge to existing schemes vs. the ability to transform knowledge structures when knowledge cannot be assimilated
3. Exploit new external knowledge
What are ambidextrous Organizations?
a form of organization that allows a company to be both exploratory and exploitative.
What is Keiretsu?
Keiretsu (jap. 系列, literally: 'row', 'line') refers to Japanese associations of companies, also called "economic composite groups". The companies are legally independent but economically interdependent.
What are the four generic strategies of M&A?
- Diversification
- Horizontal Integration
- Vertical Integration
- Geographic Expansion
What is a Merger?
A merger is the combination of tow firms, which subsequently form a new legal entity under the banner of one corporate name.
What is Acquisition?
An Acquisition is when one company purchases most or all another company’s shares to gain control of that company.
Why did the Covid Situation push the M&A to a never seen maximum?
- Companies want to digitalize their business models and there are many technology and knowhow acquisitions on the market
- Catch-up from 2020
What are the McKinsey Archetypes of an Acquisition?
- Improve the target company’s performance
- Consolidate to remove excess capacity from industry
- Accelerate market access for the target’s (or buyer’s) products
- Get skills or technologies faster or at lower cost than they can be built
- Exploit a business’s industry -specific scalability
- Pick winners early and help them develop their business
Additions
- Roll-up strategy
- Consolidate to improve competitive behavior
- Enter a transformal merger
- Buy cheap
What is BATNA?
Best Alternative to a Negotiated Agreement
What are the three ways of definding a companies value?
Accounting valuation
Market multiples
Discounted Cash Flow
How is the Book value per share calculated?
Shareholders equity / number of shares
how is the market value per share calculated?
(market cap of the company - the depts) / number of shares
What does EBITDA, EBIT, EBIAT have in common?
it is all before interest
What are the problems with market multiples?
- If the entire neighborhood is over- or undervalued
-the company has few or no comparable (e.g unique product or strategy or whatever) assets
- if the company has superior prospects, using an industry multiple will produce a too low value
- Advisors may pick a comparable companie to produce a desired result
- Advisors adjust the multiple after the fact baed on their “experience and judgement”
What is the discounted Cash Flow?
The market value of an asset, investment, business, or company is the sum of all future cash flows it is expected to generate over its lifetime (adjusting for the timing and risk of the cash flow)
What is corporate Venturing?
Corporate venturing describes the participation of mature, established (large) companies in small, young pioneering companies. The aim of such participations is primarily to secure innovation and strategic future options for the established company and to secure resources (finance, personnel, know-how) for the pioneering company
How do investments diverse?
- Minority vs. Majority
- Direct investment vs. indirect Investment
What is a venture capital fund?
Venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups
What is the main reason for M&A failure?
Post-merger integration (“Win yourself to death”)
On what is M&A Success dependend on?
- Speed
- Communication
- Organization (Integration Board)
What is TAM - SAM - SOM?
TAM = Total Addressable Market (total market that is theoreticaly possible to reach
SAM = Serviceable Addressable Market (Total Market that is within the geographical reach)
SOM = Serviceable Obtainable Market ( The porture of SAM that on can capture)
What are the 5 phases of negociation?
- Relationship
- Perceptions
- Interests
- Options
- Criteria of Legitimaccy
- BATNA
What is the difference between an asset deal and a share deal?
Asset Deal
- Purchase of a company’s assets
- Buyer becomes owner of the purchased assets/parts of the company, but not the company
Share Deal
- Purchase of a company itself
- Buyer becomes owner and shareholder of the company with all its assets and liabilities
What is the difference between signing and closing the deal?
Signing: Formality of getting all the paperwork done
Closing: when the escrow company is transferring the ownership of the company
