Contents
This report is based on the following requirement - - PART A
- With reference to the academic literature and using your analysis of relevant environmental factors, speculate how (the process) and why (the drivers) ADL identified Custom Coaches as a potential acquisition. In which areas are the expected benefits and synergies for both companies involved? HYPERLINK "http://www.alexander-dennis.com/" http://www.alexander-dennis.com/ and
- HYPERLINK "http://customcoaches.com.au/" http://customcoaches.com.au/
- Using PESTLE of Australia for the analysis.
- The process and the drivers (as attached text pg 66/67/68/69)
- Benefits and synergies of the acquisition
- Comparing the values, mission and vision for both ADL and Custom Coaches
- (20 marks) (approx. 600 words)
- With reference to the academic literature, explain the risks associated with the choice of acquisition as a vehicle for this particular strategic development. Compare and contrast this decision with that to form a joint venture with New Flyer Industries in the USA, also in 2012. HYPERLINK "http://www.newflyer.com/" http://www.newflyer.com/
- Risks involving Political, Commercial, Cultural, Currency
- Compare and contrast between acquisition and joint venture
- Relate the advantages and disadvantages for both acquisition and joint venture
- (Some advantages of joint venture includes shared costs and risks, gains access to needed resources, gain economies of scale, pursue long-term strategic goals)
- Use Michael Portal value chain. (as attached)
- (20 marks) (approx. 600 words)
- By applying appropriate theory and using evidence from your research of these companies, analyse the national and corporate cultures involved. Speculate on the actual and potential impact of both on this ‘partnership’ between ADL and Custom Coaches.
- Use hofstede to analyse the National culture between Australia, United Kingdom, and United States and discuss on the differences and recommend possible actions and resolution to mitigate the partnership HYPERLINK "http://geert-hofstede.com/australia.html" http://geert-hofstede.com/australia.html
- Compare 3 dimensions using Hofstede:
- United Kingdom (ADL) merger/acquisition with Australia (Custom Coaches) and United Kingdom (ADL) joint venture with United States (New Flyer)
- Use ADL and Custom Coaches Values and Cultures to analyse the Corporate cultures to discuss on the differences and recommend possible actions and resolution to mitigate the partnership
- (20 marks) (approx. 600 words)
- Drawing upon academic literature and theory, critically discuss the long-term (10 years +), strategic effects, both positive and negative, of exchange rate movements on the deal during the exploration/negotiation period and after the deal was agreed.
- Exploration Period: There is no exchange risk to ADL nor Custom Coaches as no foreign currencies/amounts are transacted.
- Negotiation Period: ADL will face transaction exposure (need to sell GBP and buy AUD) for acquiring Custom Coaches should the negotiation turns out successful. But the question is the length of negotiation that brings forth exchange rate uncertainty to ADL. FX movements can be either positive or negative impact (long-term) on ADL’s income statement.
- After the Deal
- Economic exposure for Sydney-based Custom Coaches and ADL e.g. purchase of oil prices which is quoted in USD but ADL’s operation is in GBP whilst Custom Coaches in AUD. FX movements can be either positive or negative impact (long-term) on ADL’s income statement.
- b) Translation exposure due to consolidation of group accounts at ADL where Custom Coaches financials, based in AUD, will be “translated” or converted into GBP for accounting purposes. FX movements can be either positive or negative impact (long-term) on ADL’s income statement
- (20 marks) (approx. 600 words)
- PART B
- Identify three (3) specific aspects or challenges of doing business internationally that you personally have come to appreciate through the seminars or Expert Lectures on this module. Explain why these are personally significant and discuss how they will influence you if you go on to an international business career.
- Refer to assignment aid for Question 5
- 1st specific aspects: National culture (Can compare Singapore vs United States national culture using hofstede) HYPERLINK "http://geert-hofstede.com/singapore.html" http://geert-hofstede.com/singapore.html
- 2nd specific aspects: Political risks
- 3rd specific aspects: Commercial risks (how to thrive in the job market)
- (20 marks) (approx. 600 words)
- Appendix 1: SWOT analysis of Sydney-based Custom Coaches by Alexander Dennis (ADL) in 2012. (approx. 350 words)
- Appendix 2: SWOT analysis of New Flyer Industries in the USA, also in 2012. (approx. 350 words)
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