Recruitment and Selection Strategies Essay Example for Free

Recruitment and Selection Strategies Essay Over the past five weeks, work was completed on an employment compliance plan, compensation, and benefits strategies plan, performance management strategies suggested, advise given on training plans, and this week, we will provide recommendations on recruitment and selection strategies. Within these suggested strategies, the importance of implementing the following will be highlighted, the goals for Bollman Hotels, anticipated demographic changes, analysis of projected workforce needs, objectives of workforce diversity, branding of the organization, methods for recruiting, screening, and selecting candidates. Organizational Goals Bollman Hotels has net revenue of $100,000,000 with a 15% growth expected within the first year. A workforce of 25,000 employees with plans to increase by 20% with the expansion to India and the current employee turnover is 5%. Based on this information and the stage of their business development, they will need to enter the Indian market fiercely, but with as little interruption to the tourism industry as possible. Therefore, Bollman will have to be competitive and establish a premier hotel chain that will lure international travelers seeking the exotic, heterogeneous, and lavish experience by offering elitism while on business or pleasure (Incredible India, n. . ). It is recommended that the goal of Bollman Hotel’s in India is to open and operate at a five star deluxe status and be competitive with hotels such as Taj Falaknuma Palace, ITC Hotel Kakatiya, Park Hyatt, Hderabad, and The Ashok, just, to name a few (Ministry of Tourism, Government of India, 2013). Therefore, Bollman Hotels will be a premier chain while aligning itself with the Government of India’s to urism and hotel requirements (Ministry of Tourism, Government of India, 2013). Forecasted Demographic Changes Bollman Hotel’s entrance into the Indian market also means a shift in the demographics. Affluent international clients visiting Bollman hotels will bring notoriety to the region that they are located resulting in an economic boost. A thriving emerging economy means Indian Nationals (both men and women) experience a socio-economic change with an increase in jobs and income in that region. Additionally, with the increase in birthrates, the candidate pool has increased and Bollman will help to provide these well needed jobs (Chua, 2012). Five-Year Workforce Plan Based on the organizational goals and demographic changes, it is recommended that Bollman adopt a three-step plan to analyze its present workforce. This will help to identify the needs over the next five years (Analyzing Your Workforce, n. d. ). First step includes a supply analysis – evaluating current resources and includes the number of persons performing specific job functions in Minnesota, how many are supervised by one person and is it sufficient. What is the current pay rate in Minnesota and what will work best in India and what are the areas that contribute the most to the current 5% turnover rate and what will decrease it (Analyzing Your Workforce, n. d. ). Second step recommended is a demand analysis that will evaluate the future needs of Bollman Hotels. This analysis will determine the jobs necessary for optimum service, the jobs that can be combined or eliminated, the possible technological changes to operate best and the areas that can be performed more economically and effectively (Analyzing Your Workforce, n. d. ). The final recommended step is a gap analysis that will identify a projected need that has not been met or an excess. This is done by comparing the supply and demand results. Based on the results received from the gap analysis, solutions such as additional training, increased staff, and more efficient recruitment and hiring processes can be done over the next five years (Analyzing Your Workforce, n. d. ). Workforce Diversity Objectives Diversity is the variations that exist in an organizations based on age, gender, educational background, ethnic groups, culture, and working customs (Lai, 2013). Workforce diversity helps to manage the change that has taken place in the workforce from a manufacturing to a service industry that Bollman Hotels provides (Cascio, 2013). Second, market globalization is another factor and with Bollman’s move into an international market, it is important that they understand their internal market its customers to operate best (Cascio, 2013). Third, many businesses are requiring increased teamwork (Cascio, 2013). Bollman has experience with this demand in Minnesota with peak operating seasons and have had to increase the number of personnel that work at once. The same will apply in India. Fourth, there are increased mergers and strategic international alliances (Cascio, 2013) and with Bollman’s international move, there will be a difference in the corporate culture. Therefore, it is recommended that diversity training is provided. Finally, India is an evolving economy and with an expected increase in diverse workers such as women it is imperative that Bollman Hotel workers understand that the aim is to provide quality service to everyone (Cascio, 2013). Organizational Branding Organizational branding is essential at this point of the recommendations to Bollman Hotels. With a goal to be known as a five start deluxe hotel, it is important to put the name Bollman Hotels in the Indian market and among the local areas in the United States and Europe known for international business travel. It is recommended that this is done through traditional advertisements in local papers in the language of each country and most important and relevant to these recommendations, through hiring diverse employees (Cascio, 2013). This will ensure that Bollman is known to help create a boost in the Indian economy and the demographics as previously mentioned, hence, causing more word-of-mouth marketing internationally. Also, the service standards and five star statuses will also be something to rave about. Methods for Screening Candidates It is important that Bollman Hotels has a process for screening candidates; therefore, recommendations will be made for interview methods, testing procedures, and interview process considerations, all of which will cover the screening process. Interview Methods Employment interviews allow organizations to have an idea of the skills and personality traits that a candidate possesses (Cascio, 2013). It is therefore recommended that Bollman Hotels interview team have interview questions built on-the-job analysis done. Create general questions for all candidates, use thorough rating scales with descriptions of desired behaviors as scale points and recording notes focused on the behavior of the candidate. It is also recommended that several interviewers are used with a diverse number of them and that vast training is provided on how to conduct interviews. Interviewers are also encouraged to wait until all interviews are complete prior to discussing any candidates and finally, use statistical information and overall views of the candidates to decide (Cascio, 2013). Interview Process Considerations To ensure that the interview is a fair process, it is recommended that the panel focuses on-the-job competencies, assess resumes and applications by concentrating on specifics in line with the job requirements. Consider things that identifies if a candidate meets the requirements and skills that they possess from precious employment that are applicable (Cascio, 2013). Use open-ended questions to stimulate elaboration on topics and use questionnaires that will highlight how well someone will perform and overall fit. It is also recommended that scenario type questions are used as this will give an idea of how they will handle specific situations (Cascio, 2013). Finally, given this is a US company going into India, it is recommended that interviews are done in relaxed environments. This will allow candidate to be more open and relaxed with their responses also giving the interviewer a chance to note both verbal and non-verbal responses (Cascio, 2013). Testing Procedures Employment testing is necessary for Bollman hotels, not only based on the location, but also to protect them and to ensure they are hiring suitable employees. The tests recommended are work-sample tests, leaderless-group discussions, personality measures, and integrity test. Bollman Hotel’s goal in India is to be a premier chain; hence, service delivery is important. So, job fit is important and an integrity test will help to outline the attitudes of prospects toward stealing, dishonest behavior, violence, and drug abuse. This it done through overt integrity test clear purpose esting and personality-based measures disguised -purpose test (Cascio, 2013). Employees will have access to guest rooms and information, so ensuring that Bollman has an idea of their tendencies, could help with selection. Another testing method is the work-sample tests used to analyze an applicant’s ability to perform a job task (Casco, 2013). Placing an employee in a hotel ro om or situation based on the job they applied for will show the interviewer if he or she can perform this task, such as spreading a bed according to Bollman Hotel standards for example. Leaderless-group discussion is another method and entails placing several candidates at a round table and giving them a job related topic to discuss. Each person will naturally approach this based on his or her abilities and personalities. This is recommended for Bollman as it will help to determine persons suitable for supervisory roles or otherwise. Finally, the personality measure test is recommended as it will help to identify personality characteristics such as neuroticism that is the level at which an individual is insecure, anxious emotional or calm, and self-confident. Extroversion looks at how an individual is gregarious, assertive, and sociable. Openness to experience looks at how an individual is cooperative, and warm, and conscientiousness looks at how hardworking, organized, and dependable someone is (Cascio, 2013). Personality measure is recommended because it will give an idea of persons most suited for jobs where they will interact with guest the least or the most based on their personalities. Methods for Selecting Candidates The candidates chosen for the jobs at Bollman Hotels in India will have to be in tuned with the culture of prestige and superb customer service. To do this, it is recommended that all the persons involved in the interview process are gathers and each will give their thoughts on each candidate and narrow the candidate pool. The process can be repeated until the desired number of employees has been reached (McNamara, n. d. ). The interview results and subsequent selections can be coupled with test results to make decisions as well. Job Offer The job offer is another important step in the employment process. The following are recommended when presenting the job offer to a successful candidate. Prepare a letter stating how thrilled the company is to offer them the job, outline the exact compensation offered, and outline the benefits him or her is entitled to. The letter should have a signature line for them to indicate their acceptance of the job within a specified time and the contact information for the Bollman Hotel’s personnel office if the need arises (McNamara, n. d. ). A three month probation period is recommended in addition to orientation for one week and on-the-job training for four weeks. This should also be outlined in the letter in addition to a copy of the job description (McNamara, n. d. ). Impact of Organizational Diversity on Organizations Diversity caused organizations to grow and operate more efficiently in global markets as they understand the need to relate to their customers. This also creates a competitive advantage when customers see an active effort to embrace diversity. Diversity also effects an organization by building brand equity for companies that choose to invest in multicultural advertising. They become known globally (Cascio, 2013). Organizations are also seeing that diverse employees need to be embraced to retain productive talent. Corporate image is also a factor and is increased as organizations known to employ diverse employees are more attractive to job seekers and companies seeing alliances (Cascio, 2013). It is recommended that Bollman capitalizes on the impacts of diversity as they are entering into a diverse and global market-place. Laws to Consider for Recruitment Selection It is important that Bollman Hotels remembers that employee and future employees have specific rights under specific laws. Consent is needed for background checks to be done on applicants, and this is covered under the Fair Credit Report Act and is necessary for checks done by a third party. Also, if references are provided on an applicant, they have the right to petition to see this reference under the Family Educational Rights and Privacy Act of 1974 (Cascio, 2013). Conclusion In this final recommendation prepared for Bollman Hotels, the following were effectively addressed. The organizational goals, forecasted demographic changes, five-year workforce plan, workforce diversity objectives, organizational branding, methods for screening candidates using highlighting the interview methods, interview process considerations and testing procedures. Recommendations were also made for methods for selecting candidates, the job offer, impact of organizational diversity on organizations and recruitment selection laws to consider.

The Storm :: essays research papers

The Storm   Ã‚  Ã‚  Ã‚  Ã‚  The first rays of dawn shone upon my face. The sunlight illuminated the interior of my tiny yacht. Rising, I stood at the deck, watching the now sparkling blue sea. For the first time, I felt dwarfed by the vastness of the sea; my yacht was nothing compared to the sea. It was the second day of my cruise around the world, a silly challenge I had taken up in a moment of folly. Still I was determined to prove myself in my group of friends. Such an odyssey would gain my prestige rivaling that of a pop star. However, I had no idea what was to come later.   Ã‚  Ã‚  Ã‚  Ã‚  I scanned the morning skies for any cloud that might bring unwanted rain. There was none. Satisfied with my observation, I went into my cabin, and checked the weather instrument. All was fine, except that the surrounding air pressure was dropping quickly. I was not unduly alarmed. Air pressure fluctuated at sea and thus, I never realized what was about to come. Had I realized, I would have probably abandoned the original course and head for shore.   Ã‚  Ã‚  Ã‚  Ã‚  Around noon, the winds began to pick up. Hoping to gain a little more speed, I hoisted my sails. All was fine until a few moments later. The sky turned dark, rendering day into night. All around me, there was silence, except for the occasional howl of the wind. The sea and the sky blended as one; the whole area turned into night and clouds concealed the sun. The winds steadily grew stronger. Fumbling in the darkness, I searched for my torchlight, accidentally knocking over something.   Ã‚  Ã‚  Ã‚  Ã‚  It began to drizzle. Having found my torchlight, I made my way back to the steering wheel in the cabin, only to hear the cables snapping and see my mast collapse. The sea was now turbulent, with waves over three meters. The initial drizzle now turned into a heavy downpour, soaking the whole yacht. In the state of panic, I tried to radio for assistance. To my complete horror, I realized I had knocked the radio off the table earlier. It now laid broken on the floor, its circuits rendered unusable by the torrential rain. Now left with no option, I had to sit out the storm and pray that I would survive.   Ã‚  Ã‚  Ã‚  Ã‚  The rain steadily grew worse. Visibility was reduced so much the darkened skies, illuminating everything in their path.

Marketing Plan for Lords Ice Cream Parlour

TABLE OF CONTENTS *1. 0 EXECUTIVE* SUMMARY ‘Lord’s Ice-cream Parlour’, one of the prime ice cream products situated in St. Johns Wood with a good market share is one of the best in that area providing ice cream with fresh taste and modern packaging. It was established in 1998, ‘Lord’s Ice-cream Parlour’, at present uses straight-line technology for manufacturing more than twenty three types of premium ice cream in its factory in Swiss Cottage, producing nearly 530 liters of ice cream each day . Lord’s Ice-cream Parlour’ has a two year marketing plan for current customers as well as its new consumers to attract and satisfy those target groups of consumer. The company wants to increase its market share by 7% and compete with the current and new entrants. For the next two years the company wants to increase its promotional activity. The management has a plan to utilise its one- fourth of its profit for promotional activity. The manag er is also planning to increase its branches in two to three different locations. *3. *0* COMPANY* PROFILE 4. 1 MISSION Mission is the organisation’s reason for existence. The mission describes the organisation’s shared values, beliefs and reason for being. ‘Lord’s Ice-cream Parlour’ without playing an exception, being committed to achieving the highest quality products and positioning itself as a good brand by gaining the consumer’s trust aligns effectively to its guided mission that echoes-â€Å"The world of great taste†. This includes a dedication to review the existing operations, the evaluations and the creation of the new products by not only manufacturing the highest quality products but also delivering the product by maintaining this high quality. To satisfy the ever-changing needs of the customers, ‘Lord’s Ice-cream Parlour’ is launching regularly new ice creams and introducing new flavours. Thus in a few words it can be said –‘Lords Ice-cream Parlour’ is based the relationship with customer. 4. 2 VISION The message from the managing director of ‘Lords Ice-cream Parlour’ propagates as: â€Å"I dreamt of a business venture that would have distinct appeal to society for its unique qualities and eventually will become a role model for other business enterprises. This simple but extraordinary quality is â€Å"Be True to The Society. ‘Lords Ice-cream Parlour’ as being a very prospective SBU’s which is guided by this similar vision. As a result this key philosophy has earmarked ‘Lords Ice-cream Parlour’ as the most trusted and one of the better companies in the country. † 9. OBJECTIVES Corporate Objectives: To give an insight to the ice cr eam industry, the company and the product line. To make an assessment of the interaction between ‘Lord’s Ice-cream Parlour’ and its immediate environment and analyse the impact of various trends upon its survival and long-term success. To conduct an investigation of the wide range of strategies pursued by ‘Lords Ice-cream Parlour’ with a view to achieving its objectives. Marketing Objectives: To analyse the marketing strategies for ‘Lords Ice-cream Parlour’ and assess its target consumers and competitors. To regain the 15% of the inactive member by December 2010. To provide an introduction of the strategic aspects of marketing with particular reference to the analysis of marketing mix. To increase the revenue by 12% by December 2010. To increase the market share by 7% by December 2010. To analyse the techniques of segmentation, targeting and positioning of products. To analyse the distribution channels and the role of intermediaries in the distribution network. To develop an appreciation of the need to evolve a promotional mix appropriate to the product. To explain and analyse the role of Marketing Research. To have a clear analysis of the various growth strategies for the market opportunity identification. Research was undertaken by gathering descriptive information from the managers, customers and employees in the form of personal interviews. Both quantitative and qualitative analysis has been emphasised. Both primary and secondary data were obtained through informal interviews with the company and questionnaires to customers. Moreover in cases where managers and customers were unwilling or unable to provide information, observational research played a vital role. It must be added that the report though, tried to give an overall view of ‘Lords Ice-cream Parlour’, it focused on London City as their area of study. Primarydata was first collected by taking in depth interviews of the Marketing Executive and Sales person to have a better insight to the marketing aspects of ice cream. Mostly personal interviews were undertaken since flexibility, quality of data that can be collected, speed of data collection and response rate is extremely high and information seems to be more reliable and effective. Only unbiased, relevant and valuable data of related issues were recorded to ensure a critical evaluation of the marketing techniques and strategies used by ‘Lords Ice-cream Parlour’. Problems were faced during the interview, as the managers were reluctant to disclose some of the confidential aspects of the organisation. All the data obtained were not always reliable and hence subject to error. Due to the time constraints I could not complete a comprehensive investigation and there were some areas that were left unexplored. In many occasions managers were hesitant to cooperate in providing honest answers. 8. 1 The Marketing Environment No business is large or powerful enough to create major change in the external environment. These factors are generally uncontrollable, thus market managers are basically adapters rather than agents of change. So it is vital for ‘Lords Ice-cream Parlour’ to take these factors into consideration in every step of their decision -making process and day-to-day activities. THE MARKETING ENVIRONMENt {draw:frame} {draw:frame} {draw:frame} The Task Environment ‘Lords Ice-cream Parlour’s task environment consists of those micro groups in the environment such as suppliers, distributors, customers and competitors. These are interrelated groups that influence managers on a daily basis. SUPPLIERS: From 2010 January the management decided to open two new branches. And two other retail stores are interested to take the product from ‘Lords Ice-cream Parlour’. The main function of the distribution unit of ‘Lords Ice-cream Parlour’ is to create a sequence of effective network so that an important strategic edge over competing channels are created and ensure a continuous flow of its products to the ultimate consumers – target market. The activation of the distribution channels proceeds from their factory and ends at the retail outlets of refrigerated vans. CUSTOMERS: Being the major source of survival and profit, customers form the most important component for an organisation like ‘Lords Ice-cream Parlour’. ‘Lords Ice-cream Parlour’ considers customers as being their life-blood of survival and is taking the maximum innovative efforts that can be utilized for utmost customers’ satisfaction. Customers here can be segmented to family, kids, teenagers of high end, mid end and low end of the market. ‘Lords Ice-cream Parlour’ operating in such ever-changing world of tastes and preference pays heed to customers’ choices and their attitudes. They, very keenly take on customers’ advice, try and amend as well as add new dimension to their business in order to ensure survival in this highly competitive industry. COMPETITORS: One of the most important forces that always keep an organisation on guard is its competitors. Competitors are organisations that produce similar goods. In the context of ‘Lords Ice-cream Parlour’, Movenpick, Baskin Robbins, Thorntons and Marine Ices are their competitors. But surprisingly, the marketing management of ‘Lords Ice-cream Parlour’ views these local brands as mere participants in the same industry rather than as competitors. The General Environment Economic, technological, socio-cultural, demographic, political and legal, and global forces form the macroeconomic environment that ‘Lords Ice-cream Parlour’ operates in are as follows: ECONOMIC: Economic forces are of concern to businesses involves producing goods and services that people want and pay for, as because the economy is an indicator of the general health and well being of a nation. ‘Lords Ice-cream Parlour’ takes into account various economic factors, preferably the rates of inflation, the exchange rate and level of income. The prime reason for such is to have a control over its allocated budget for domestic and imported raw materials. But most importantly alertness of economic variables is necessary to determine ‘Lords Ice-cream Parlour’s pricing strategy so that all segments of the population can afford to buy their products. One of the most pervasive factors in the environment, the impact of technology is seen as the combination of skills and equipment’s that marketers use in their day-to-day operations. In ‘Lords Ice-cream Parlour’, use of technology can be seen in terms of the automated cone baking machines, chocolate making machines, injected deep freezers, milk processing machines and others. These innovate machines are able to produce ice creams at a faster rate while not undergoing any sacrifice in the level of quality, and thus their warehouse has capacities in five hundred liters. The socio-cultural environment is made of institutions and other forces that affect social values, perceptions, preferences and behaviour. In the context of a diverse people, ‘Lords Ice-cream Parlour’ has customized its services according to the country's culture. While the producing ice cream, ‘Lords Ice-cream Parlour’ puts strong emphasis in it. DEMOGRAPHIC: The demographic forces are of interest to marketing managers because it involves people and people make up the markets. Demography shows the populations inclinations towards certain social structure and the increase or decrease in certain age groups . For ‘Lords Ice-cream Parlour’ demographic factors are of advantage if it shows an increase in the number children and teenage population (the most lucrative segment for the ice cream industry). POLITICAL AND LEGAL: The formation, maintenance and survival of any organization are dependent on the stability of a country’s political and legal system. A comprehensive analysis of the political and legal factors by ‘Lords Ice-cream Parlour’ helps in ensuring stability in terms of its operations. The legal consideration lies in the awareness of various laws regarding import of raw materials and the like. 8. 2. * Current* Situation Analysis Core Competencies: Among its normal premium and novelty cup, stick and family pack items, chocobar is the most popular among consumers contributing 29% to the total sales, while vanilla, mega, cornelli and macho, each with sales of about 5%, and have also made their distinct places in the minds of the consumers. The company is giving its effort and concentration for some new and modified flavour of ice-cream. The company wants to increase its market share by 7% for which it is introducing some new marketing strategy and it will be implemented from the next year. Market information: ‘Lords Ice-cream Parlour’ is in their 10th year of business. Being an ice-cream parlour in the St. Johns Wood High Street area, its main activity is to attract customer by its variety of ice-cream flavour. ‘Lords Ice-cream Parlour’ possesses good information about the market and having a good idea about the consumer trends and the likeability of the consumers. And this information helps them to understand how well they can communicate with their consumers and how better they can be served. Geographic The geographic target for the ice-cream parlour is St. Johns Wood area. Five square kilometre people are targeted. Total targeted population is approximately 13,500 64. 9% are economically active and 35. 1% are economically inactive. A fulltime employee’s individual average income is ? 29,305. 48. 8% are educated and 52. 2% has got no qualification. Behaviour factors Recognize the need to have a good dessert like ice-cream. People likes ice-cream more than any other dessert. Ice cream is the symbol of lifestyle. Market needs: ‘Lords Ice-cream Parlour’ is providing their customers delicious ice-cream and a place for enjoyment. It seeks to offer the following benefits that are important for their customers: Customer’s preference is to get healthy ingredients in their specific flavour. Customers also prefer a better service and attention from the staff. Market Trends: ?Last two years’ consumers has less money in their pocket, so that they are spending less money on dessert and ice-cream. Fitness is very important for the people, that is why people are avoiding ice-cream A big percentage of people are going to pubs and bars rather than coming to the ice-cream parlour. *09. * BCG MATRIX Boston Consulting Group (BCG) matrix is a framework for highlighting and analyzing product development policy and associated cash flows implications in a firm. The BCG approach is based on the philosophy that a product’s market growth rate and its relative market share are important considerations in determining its marketing strategies. The marketing strategies of ‘Lord’s Ice-cream Parlour’ is based on the BCG matrix which includes an integration of the firms products into a single overall matrix and an evaluation to determine appropriate strategies for all the different strategic business units (SBUs) of the company itself and the overall portfolio strategies. ‘Lord’s Ice-cream Parlour’ identifies the BCG matrix as a powerful tool To analyze the current situation of the company which is based on the present and projected market growth rate and proposed market share growth. To determine and classify each product expected future cash contributions and future cash requirements. To examine the competitive position of a product or a product line and the opportunities for improving products contribution to profitability In figure below, which is based on work by the Boston Consulting Group, consist of four quadrants in the grid, which represents distinct categories of SBUs or major products of ‘Lord’s Ice-cream Parlour’. The categories differ with respect not only to market growth share and industry growth rate but also on cash generation and needs for appropriate strategies. draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:rect} {draw:rect} {draw:rect} {draw:rect} {draw:rect} {draw:frame} {draw:rect} {draw:rect} {draw:frame} {draw:frame} Cash Cow: Cash cow has high market share but low growth rate. Since its inception as a business in 1998, the Construction Company has had a remarkable track record and has grown to be a better co nstruction houses in the country. Long run survival through effective strategies of defending its market share by reinforcing customer loyalty has insured the generation of more cash than can be reinvested profitably in its own operations. As a result cash from the construction company flows out to support other SBUs that needs more resources. Star: Star has high market growth rate and high market share. The Marketing Manager of ‘Lord’s Ice-cream Parlour’ identified Construction and Ice-cream as their star businesses. A number of prospective factors can be reckoned to as being responsible for both SBUs performance. Both Construction business and Ice-cream occupy a dominant position in the market. Star businesses usually grow very fast and have high prospects for growth. For example, Ice-cream grew by 3. 1% in the last year (2008), compared to their 5%in (2007). Question Mark: Question Mark has high growth rate, low market share. The identification of the marketing division of ‘Lord’s Ice-cream Parlour’ as its problem child, has characterized this business to have high prospects for growth but which has not yet achieved strong foothold in an expanding but highly competitive market. This inability to generate cash has resulted in poor profit margins and hence its need to be augmented by heavy investment from outside sources. Dog: According to ‘Lord’s Ice-cream Parlour’, no SBU (currently operating) falls under the grid of low market share and low growth rate, that is, the dog. On a concluding note, the long run health of any company depends on having some products that generates cash (and provide acceptable reported profits) and others that use cash to support growth, with no exception to ‘Lord’s Ice-cream Parlour’. Among the indicators of the overall health are the size and vulnerability of the cash cows, the prospects for the stars, the number of problem child, and dogs if many. 10. SWOT Analysis SWOT is the planning exercise used by ‘Lords Ice-cream Parlour’, which provides a framework for identifying internal strengths and weakness and the external opportunities and threats it faces. WEAKNESS: The major weaknesses of ‘Lords Ice-cream Parlour’ comprises of: Incurrence of high-level expenses in the Research and Development (R) sector. High operating and maintenance expenses resulting from the large size of the business. Excessive reliance on foreign suppliers. Entering new related businesses – This is also visible through its new items as Ammo milkshake. Widening the product range. Seeking faster market growth. Exploiting new market segments. Changes in demographic factors. Change in consumer taste: This might result if there is an increased awareness among the health conscious people, which may cause a decline in the purchase of ice cream. Increase in foreign competition. Rise in new or substitute products. Changes in Political factors. 10. THE *Target *AUDIENCE (*Marketing*) The kind of market ‘Lords Ice-cream Parlour’ operates in is characterized by the volatility of its general environment, the dynamism of its competitors and most of all the varying and the inconsistency of needs and buying preferences of the consumers market, which are important consideration guiding their day to day operations. Keeping this in mind, ‘Lords Ice-cream Parlour’ has developed sound marketing programs, which starts with identifying the differences that exists within a market, deciding which segments will be selected and developing specific marketing mixes so as to influence intended customers, and overall perception of the brand, ‘Lords Ice-cream Parlour’ . Market Segmentation ‘Lords Ice-cream Parlour’ has designed various marketing mixes according to the different products needs and preferences with regard to the consumer market and has clustered people with similar needs into selected segments. Domestic Market Segmentation For a consumer-oriented company like ‘Lords Ice-cream Parlour’, whose main operations rallies around the domestic market, a lion’s share of its resources is devoted towards serving the domestic consumer segments. After thorough analysis, behaviour and demographic segments have been identified as their prime areas of focus. Demographic Segmentation From the viewpoint of an ice cream manufacturing company, demographic segmentation holds importance in terms of its close relation to customer product needs and purchasing behaviour and the ready measurability of variables such as consumers’ age and life cycle and their income. Age: This is the most important component of demographic segmentation. Over the years, ice creams were considered to as being more of a recreational product, but standing on this new century, the effect of globalization has placed ice cream as more of a regularity in our lives. ‘Lords Ice-cream Parlour’ has divided its markets in segments according to different age groups such as kids, teenagers, and the family range. Different ages of people are influenced by different flavours of ice cream, different presentations of packaging and different product attributes. Kids incline more towards ice creams, which contains animated and colourful packaging, taste of sweet strawberry, fresh mango, pure vanilla, ripples, hazzle nut coating and crispy flakes. Teenagers prefer low calorie ice cream, more daring and wider range of tastes. Families are influenced more by ice creams that fulfil the general appeal and taste of all the members of the family. Income: Income is the key determinant of consumers buying behaviour. It is the most popular demographic variable for market segmentation. For a larger part of the population to buy the product, it is very important to segment the market in different income groups. This is given utmost importance in London where there is wide variation in the average levels of income. ‘Lords Ice-cream Parlour’ has divided the market into three income groups – low-income group, mid-income group and high-income groups. Market Targeting After market segmentation, ‘Lords Ice-cream Parlour’ goes for designing, implementing and maintaining marketing mixes intended to meet the needs of the target groups, resulting in mutually satisfying exchanges. Domestic Market Targeting The two general strategies ‘Lords Ice-cream Parlour’ uses for selecting target markets are differentiated and undifferentiated marketing. DIFFERENTIATED: UNDIFFERENTIATED: Undifferentiated target strategies approach the segment as one big market with no individual segments and thus require a single marketing mix. Chocobar and the newly introduced Kulfi are the prime examples related to successful targeting of the mass market. Chocobar priced at ? 3. 4/-, mini chocobar priced at ? 2. and Kulfi priced at ? 1. 6 with sober colour packages enables ‘Lords Ice-cream Parlour’ to go for mass marketing. Market Positioning Positioning refers to developing a specific marketing mix to influence potential customers overall perception of a brand, product line or organization. The marketing manager of ‘Lords Ice-cream Parlour’ assumes a realistic view of how customers think about their offerings in the market. At the same time, the ma nger also knows how he wants target customers to think about its marketing mix. According to him positioning issues are especially important when a competitor in a market appearsto be very similar, with the ice cream industry being a prime example. ‘Lords Ice-cream Parlour’ follows several positioning strategies. Products Attributes Macho – Exquisite Chocobar – Energetic Shell & Core – Metange Lolly – Eager Clown – Animating Mega – Energetic Coffee – Refreshing Ripple – Praiseworthy Pralin – Puissance Cornelli – Dual Usage Occasion: Usually consumers perceive ice cream as an integral part of summer. Lords Ice-cream Parlour’ aims at positioning ice creams to as being a winter item along with its regular summer item image. ‘Lords Ice-cream Parlour’ is trying to position its ice cream as a item for all seasons in other parts of the country like that is perceived in London, through different promotional activities. *11. THE* Marketing Mix There are many possible wa ys to satisfy the needs of target customers. A product can have many different features and quality levels. Service levels can be adjusted. The package can be of various sizes, colors or materials. The brand name and warranty can be changed. Various advertising media – television, newspapers, magazines, radio, and billboard can be used to attract the potential customers. A company’s own sales force or other sales specialist can be used. Different prices can be charged. Price discounts may be given and so on. With so many possible variables, is there any way to help organize all these decisions and simplify the selection marketing mix? The answer is – The customer is surrounded by the four P’s. There are additional three P’s newly invented by the marketer. An important point to note is the customer should be the target of all marketing efforts but it is not the part of the marketing mix. Hence, ‘Lords ice-cream parlour’ follows this concept and places its customers in the centre. Product: for ‘Lords ice-cream parlour’ the Product decisions revolve around developing the right product for the target market and this includes not only the physical unit but also features, brand name, company image, value and many other factors. Apart from maintaining a superior quality through its imported ingredients and bringing regular production consultants from Belgium, Denmark and Holland, the units’ separate R department regularly can analyzes new products through its market research to answer questions as: At what price consumers would like to buy the product. Flavours and essence to be used. Consumers’ feedback. Analyze other markets. ‘Lords ice-cream parlour’s Product line includes distinctive ingredients, as some are vanilla flavour with chocolate hazelnut or milk coating, some may have crispy flakes, others include cashew nut. On the other hand, to provide a taste of refreshment there are flavours including coffee, strawberry, mango, with almonds and ripples. Each of these delicacies has positioned itself as a unique brand in consumer’s mind. These eclectic tastes have been able to exceed consumer’s expectations resulting to delightful consumers and thus to the creation of a powerful company image. Apart from that ‘Lords ice-cream parlour’ also can operates through some trolleys for extending its reach to various consumers at different locations as schools, alleys, streets, parks e. . c. Consumers – Availability of scratch cards through purchase of certain flavoured ice creams enables consumers to obtain different types of gifts such as iPod, mp3 player can be achieved by them. Also last year (2008) every purchase of Macho had a Kit Kat free. *PEOPLE*: The management of the ice-cream parlour is very particular about the selection of the people. They are hiring only the mot ivated, energetic and passionate people. The parlour has on job training and skill development continuous activity by which employee can be skilled. But from next year every after three months they are going to arrange a training and motivation program for the improvement of their business. *12. MARKETING* Growth Strategies ‘Lords ice-cream parlour’, like any other company, in order to maintain a stable growth rate, focuses on reviewing the existing operations, the evaluations and the creation of the new products by not only manufacturing the highest quality products but also delivering the product by maintaining this high quality. In seeking growth, ‘Lords ice-cream parlour’ considers both its market and its products. It then decides whether to continue what it is doing – only do it better – or establish new venture. The product/market growth matrix depicts this option for ‘Lords ice-cream parlour’. The matrix is divided into four possible combinations of old and new products with old and new markets. {draw:line} {draw:line} {draw:line} {draw:line} {draw:line} {draw:line} {draw:line} {draw:line} {draw:frame} MARKET PENENTRATION: Here, ‘Lords ice-cream parlour’ tries to sell more of its present products to its present markets by the help of supporting tactics, which might include spending on price, promotion and packaging. For example, ‘Lords ice-cream parlour’ regularly alters its ice cream packaging, and provides occasion oriented price cut. MARKET DEVELOPMENT: ‘Lords ice-cream parlour’s market development strategy is evident by its entry to an entirely new area – Marble Arch. In future, ‘Lords ice-cream parlour’ plans to expand in other parts of London and are undergoing business consultancy of possible expansions in Netherlands. PRODUCT DEVELOPMENT: Nothing is more important to a company’s long-term survival and growth then the successful introduction of new products. By flipping through ‘Lords ice-cream parlour’sbook of achievements, it is evident that one of prime reasons for success has been due to constant introduction of new products. The exquisite Macho, energetic Mega, which hit the markets around two years back, were and are a real feast for ice cream lovers. The very recently introduced Kulfi has once again placed ‘Lords ice-cream parlour’ to as being a people’s brand providing a world of great taste, and which deciphers ‘Lords ice-cream parlour’s drive to maintain satisfaction of all segments of the market. Lords ice-cream parlour’ has, for the time being confined itself only to the ice cream business. Any diversification related businesses would be future-wise. The Marketing Budget {draw:frame} Recommendations In spite of ‘Lords ice-cream parlour’s remarkable success certain loopholes in the marketing aspects has been detected. After my research I came up with some possib le steps and solutions that we would like to state below. Competitors are an important component of the task environment. ‘Lords ice-cream parlour’ should pay heed to its potential competitors rather than treating them as mere counterparts. Lords ice-cream parlour’ should involve in backward vertical integration to lower the costs of value creation and lessen its reliance on foreign suppliers. For instance, incidence such as credit crunch may hinder the flow of supplies in the production process when there is excessive dependence on foreign inputs. To enhance the maturity level, ‘Lords ice-cream parlour’ should undertake the task of sponsoring more social events such as concerts, cricket, football and other such tournaments to retain its popularity in the younger market segments. Emphasize should be given on TV commercials, to capture a greater share of the market. A proper customer help line should be developed to mitigate the further needs of the customer. Conclusion From an extensive marketing analysis of the ideas and marketing concepts at work in the operation of ‘Lords ice-cream parlour’, it is possible to obtain an insight to the essential marketing practices adopted by the company. Adherence to proper marketing strategies in terms of company objectives, paying heed to target consumers and potential and existing competitors, close relationship and liaison with distributors and suppliers ensure substantial market capitalization as indicated by ‘Lords ice-cream parlour’s market share of 63% in the ice cream industry. Evidently by virtue of its unique product attributes, high quality, exquisite and mouth- watering varieties of ice creams, attractive and distinct packaging, ‘Lords ice-cream parlour’ has been able to ensure marketing excellence and enhance its competitiveness. Today’s fiercely competitive environment compels ‘Lords ice-cream parlour’ to pursue the right set of pricing strategies, policies for effective segmentation and targeting, market oriented structures of distribution and retailing, which lies at the heart of the company’s success. Its new sales and distribution flow enables the company to achieve its desired goals. In its quest to create satisfying customer relationship and optimizing the performance of the entire system, ‘Lords ice-cream parlour’ has resorted to a system of timely distribution. With the combination of effective promotional campaign and advertisement in various media, it is able to retain valuable customers and inform them about multiple brands they are offering at present. Appendix This questionnaire is conducted only for educational purposes (For Customers Only) Name: †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ Profession†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. What is your age group? How long you are coming to this ice-cream parlous? Why have you chosen this place? Do you think ‘Lords ice-cream parlour’done a better job for their customers? What do you think about the product image of ‘Lords ice-cream parlour’? If you are satisfied then which factor- Do you think that ‘Lords ice-cream parlour’is one of the top ice-cream parlous? Manufacturing and Warehousing Capacity: Manufacturing Capacity: 530 liters per day. Warehousing Capacity: Warehouse No: 3 Nos Warehouse: Store Capacity Factory: 1,000 liters Technology and its usage of modern equipment: Machine Supplier: Mark – Italy Tetra pack (Hoyal), Denmark Sabore, Denmark Hass, Austria Machine Model: Free mark 1100, Italy FM 3000, FM 6000, Italy SL 600, Denmark Cone Baking: Hass, Austria Chocolate Making: Macentyre, UK.

The Complexities Of Cross Border Mergers Finance Essay - Free Essay Example

Sample details Pages: 10 Words: 3092 Downloads: 1 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? The fifty wave of mergers and acquisition took popularity in the stream ofcross border mergers(Wikipedia)In 1998, cross-border acquisitions accounted for around 80% of FDI outflows of united kingdom in the US, on average over the 1984-1995 period, crossborder acquisitions accounted for over 90% of US FDI inflows. Cross border mergers and acquisitions are playing an important role in the growth of international production Although the basic merger or acquisition is the same worldwide, undertaking a cross-border transaction is more complex than those conducted in market because of the multiple sets of laws, customs, cultures, currencies, and other factors that impact the process.-article 102 For the first time in recent history, in 2007, the value of cross-border deals equaled the value of intraborder MAs (Economist 2007a). Article 100 Cross border ma are generally initiated by either Capital market school-capital market prospective of mergers and acq uisitions looks into revenue that is generated by the bringing together of assets of two companies. Don’t waste time! Our writers will create an original "The Complexities Of Cross Border Mergers Finance Essay" essay for you Create order They believe that a new investor becomes the owner because he/she can manage the assets in a better way then it was earlier done. These economists highlight concepts such as capital asset pricing model,agency theory, EMH, and a market for corporate control. Strategy school- unlike the capital market school, which is dependent on aspects like impact on the market after post or prior to MA, this school is interested in knowing the impact on individual entity (e.g.-impact of a merger on both the companies balance sheets, trading, business, revenue etc) Organisational behaviour school- evidence suggest that acquisitions in the last 2 decades have been much surrounded by implementation problems and bad post acquisition performance (vermeulen and barkema 2001). This school takes into account the human behaviour on post merger integration. The ecomomist are more inclined towards finding the impact of cross border MS on individuals. YEAR DEAL NATURE OF DEAL 1907 Royal Dutch / Shell- Friendly 1930 Unilever Plc /Unilever NV Dual-Headed Structures 1988 GrandMet / Pillsbury HostileDeal 1989 SmithKline Beckman / Beecham ADRand Stapled Stock 1997 BAT/ Zurich Dual-Headed and Demerger 1998 DaimlerBenz/Chrysler Global Share 1999 Vodafone / AirTouch Contested StockDeal 1999 Alcan / Alusuisse / Pechiney 3-WayStockDeal 1999 Vodafone AirTouch /Mannesmann Hostile StockDeal WHY MERGERS AND ACQUISITIONS faced with continued pressure to grow profits and with substantial cash on the balance sheet However, in many industries-telecommunications and banking, for example-further national consolidation is constrained in more mature markets by antitrust regulations, forcing companies to look abroad for new targets. In addition, as competitors, suppliers and customers become more global in outlook, many companies are feeling the pressure to expand their geographic presence just to remain competitive. agency theory (Kesner et al., 1994), hubris (Weston and Weaver, 2001; Berkovich and Narayanan, 1993; Roll, 1986; Seth et al., 2000) and empire building (Trautwein, 1990) indicate the existence of more than one motive for MAs. Hitt et al. (2001) also suggested multiple motives for firms to complete CBMAs. Acquiring of foreign targets should benefit the acquirers in many ways. First, it offers better access to product market in the forms of new sources of demand and enhan ced possibilities of receiving favourable treatment from consumers and regulators in foreign markets. Second, it leads to relatively stable cash flows owing to reduced exposure to macro-economic risk through geographical diversification as the business cycles of various countries are unlikely to move together. Third, it offers opportunities of using local resources and technology that may help reduce the cost of production. Fourth, the increased access to foreign capital markets helps in lowering the cost of capital of the firm. Finally, multinational firms enjoy more investment opportunities than domestic firms while maintaining the opportunities available in home market. Such enhanced business opportunities suggest that (a) acquisition of a foreign target should increase the value of bidder and (b) the gains CBAs should be higher than the gains from domestic target acquisitions. These should be reflected in both announcement period and long-term pe rformance of acquirers. There are a number of reasons why a corporation will merge with, acquire, or be acquired by another corporation. Sometimes, corporations can produce goods or services more efficiently if they combine their efforts and facilities. These efficiency gains may come simply by virtue of the size of the combined company; it may be cheaper to produce goods on a larger scale. Collaborating or sharing expertise may achieve gains in efficiency, or a company might have underutilized assets the other company can better use. Also, a change in management may make the company more profitable. Other reasons for acquisitions have to do more withÂÂ  hubrisÂÂ  and power. The management of an acquiring company may be motivated more by the desire to manage ever-larger companies than by any possible gains in efficiency. To facilitate faster entry into foreign market Increase market power Access to and acquisition of new resources and technology Diversification Improved management Synergy Managerial motive K. Shimizu et al. / Journal of International Management 10 (2004) 307-353 RECENT TRENDS The size of private equity has increased doubling the size of global mergers and acquisitions deals. The new figures show that private equity in cross border mergers and acquisitions is around 31% (2004-2007).new market player including financial corporations and sovereign wealth fund have entered the market. A survey by Accenture group reveals that 20% of the future growth will come from mergers and acquisitions Despite the current tightening of credit and general economic uncertainty, one area of business activity has remained surprisingly robust: MA. Although many players sat on the sidelines for the first half of 2008, global deal volume during the previous two years surpassed the record-breaking levels set in 2000. Moreover, the need for corporate growth and the availability of financing from new sources are likely to reignite the merger market boom and keep it going for the foreseeable future. The role of private equity has grown dramatically, doubling its share in global MA deals-accounting for more than 31 percent of transactions in the current MA wave (2004-2007) compared with the prior MA wave (1995-2000.) Other new investors, including corporations and sovereign wealth funds from emerging markets, have entered the MA arena. But the most significant trend has been the growth in the number of cross-border transactions, which now account for almost half of total MA deal value. While the majority of MAs involve two firms within the same country, over 40% of the MAs that were completed between 1999 and 2000 involved firms headquartered in two different countries (Hitt et al., 2001a,b) Cross-border MAs pose tremendous challenges, in particular, at the postacquisition stage (Child et al., 2001). Recent evidence suggests that they are not highly successful. For instance, a study by KPMG found approximately that only 17% of crossborder acquisitions created shareholder value, while 53% destroyed it (Economist, 1999 ). Complexities- article 102 foreign target acquisition increases the risk of the acquirer for several reasons. First, acquisition of a foreign target exposes the firm to wider range of transactions and translations risks. These may result in higher volatility in cash flows, earnings and net assets. Second, it exposes the acquirer to political risks such as threat of nationalization by host government, changes in host governments attitude towards foreign investment and amendments in financial regulations such as custom duties, taxes etc. that may affect bidders cash-flow adversely. Finally, due to differences in legal and cultural factors the agency cost of managing a foreign subsidiary is likely to be higher than running a domestic subsidiary. These factors are likely to push the cost of capital 6 which in turn reduces the value of the bidder. This suggests that, ceteris paribus, bidders of domestic targets, which are not exposed to these risk s, should perform better than bidders engaged in CBAs. Therefore, whether CBAs are superior to domestic acquisitions is an empirical issue as it addressed in the paper. The dynamics of cross-border MAs are largely similar to those of domestic MAs. However, due to their international nature, they also involve unique challenges, as countries have different economic, institutional (i.e., regulatory), and cultural structures (Hofstede, 1980; House et al., 2002) Flowback, Or I Dont Want Your Stock WhenÂÂ  foreign investorsÂÂ  perform a massive sell-off of a companys cross-listed sharesÂÂ  back to the country of issuanceÂÂ  as a result of an impending cross-border merger Flowback may be the biggest obstacle to the feasibility of cross-border mergers. Put simply, flowback is the unwillingness of target-company shareholders to hold foreign-domiciled equity of the acquirer. This sentiment is common among indexers and quasi-indexers; if themerged firm will not be indexed in the targets country, there is little incentive for these investors to hold the shares and a large incentive to sell. Many important stock indices, including the SP 500, no longer admit foreign-domiciled issuers. tax or currency issues-cross border mergers have complex tax structures which makes then deal even more complicated. Althought the government provides tax incentives Despite some harmonised rules, taxation issues are mainly dealt with in national rules, and are not always f ully clear or exhaustive to ascertain the tax impact of a cross-border merger or acquisition. This uncertainty on tax arrangements sometimes requires seeking for special agreements or arrangements from the tax authorities on an ad hoc basis, whereas in the case of a domestic deal the process is much more deterministic This uncertainty on tax arrangements sometimes requires seeking for special agreements or arrangements from the tax authorities on an ad hoc basis. The uncertainty on VAT regime applicable to financial products and services may put at risk thebusiness model or envisaged synergies . A group operating across several Member States may wish to centralize support functions to increase operating efficiency. But in many cases the result will include creating a VAT penalty on the inter group supply of services increase operating efficiency. But in many cases the result will include creating a VAT penalty on the inter group supply of services significant antitrust or non competition issues which law would be applicable- Take the case ofÂÂ  Tata Steels acquisition of UKs Corus, where the initial strains have begun to show through labour issues and could likely result in labour strikes on account of Tata Steels decision to mothball its Teesside unit in northeastern England. POLITICS AND ANTITRUST Politics still plays a role in cross-border MA-but to varying effect. In some cases, the reluctance of state shareholders to sell to foreign firms has scuttled planned transactions (although the quickening pace of privatization, particularly in Europe, should diminish these concerns). Reluctance to cede jobs and tax revenues to other states is another, potentially more enduring, obstacle. In other cases, political concerns about domestic competition and antitrust may in fact accelerate cross-border consolidation, as companies with fewoptions at home are forced to seek scale abroad. ÂÂ  The cultural complexities. One of the biggest challenges in a cross-border MA transaction is overcoming cultural and business differences. Understanding the culture, regulatory environment, benefits philosophy, customer expectations, working habits and marketing strategy of a company adds layers of complexity to a deal. Clashes in country and company cultures can easily trum p business objectives and derail a deal. Body intensity of MA activity is significantly higher in countries with better investor protection. International market for corporate control targets firms in countries with weaker corporate governance practices Zechner (2001) and Reese and Weisbach (2002) show that firms from countries with weak legal protection for minority shareholders list abroad more frequently than firms from other countries. Investor protection increases the demand for MA activity. Mearly pricing and valuation is not a good approach for final decision of whether to acquire or not. Every long term effect of the deal should be taken into concideration. Legal barriers Cross border mergers or acquisitions is a complicated transaction which involves numerous participants legal as well as private. A cross border deal (of a large firm or, of a important sector like mining, power, telecom) is actively contemplated by regulators and govt for possible flaws. There are often regulated by laws, local rules and regulatory restrictions.even at times when the bids are actually friendly takeovers acquirers are disadvantages by a potential lack of information and legal restrictions from the govt. countries having rigid legal system which leads to foggy decision ability. The bidder might not be aware of where the bid could fail or be rejected and on what grounds. In some countries the company law allows the companies to adopt defence tactics like poison pill, dual voting to prevent hostile takeovers. These efects discourages companies to take such a costly action Blocking cross-border mergers REGULATORY LAW : MA are regulated by both state and federal laws. State law sets procedures to be followed while approving a merger or a acquisition. It also establishes legal enforceability of these laws so that the acquired company and its shareholders are given a fair compensation. Law does not create any obstacle in the deal unless a question of who has the authority to regulate or govern a deal arises.m Main body We find that cross-border MAs are more likely to occur in countries where foreign institutions hold a higher fraction of the local stock market. Previous studies on cross-border MAs focus on country-level governance aspects. Rossi and Volpin (2004) find that targets in cross-border MA deals are more frequently from countries with weaker investor protection than their acquirers country, suggesting a convergence in governance standards. Starks and Wei (2004) and Bris and Cabolis (2008) find a higher takeover premium when investor protection in the acquirers country is stronger than in the targets country. In view of miller and Whitman, Ragazzi, black Stulz foreign direct investment (FDI) is the product of such factors as (a) imperfections in the product and factors markets, (b) different taxation, and (c) imperfections in the international financial markets. Effect of cross border merger and acquisition on share holder wealth cross-border transactions result in significant wealth destruction for shareholders while domestic transactions result in value generation for shareholders of German acquirers. Legal, economic or cultural obstacles to cross-border transactions, information imperfection and difficulties in post-merger integration due to cultural differences may have contributed to the negative cumulative abnormal returns to shareholders of cross-border transactions. A majority vote of shareholders is generally required to approve a merger La Porta et al. (1997) showed that investors in common-law countries enjoy the highest level of protection, while investors in civil-law countries receive the lowest. Rossi and Volpin (2004) show a strong positive relationship between takeover premiums and investor protection, suggesting that acquirers pay higher premiums when they acquire targets from countries that have better investor protection. Errunza and Senbet (1981, 1984), Kim and Lyn (19 86), and Morck and Yeung (1991) report a significantly positive relation between internationalisation and firm value. Bodnar, Tang and Weintrop (2003) corroborate the prior evidence on the positive effects of corporate international diversification on firm value, whereas Christophe (1997) and Denis, Denis and Yost (2002) find evidence that international operations lead to value destruction. Marcelo B. Dos Santos, Vihang R. Errunza and Darius P. Miller* evaluated 136 cross border mergers and acquisitions from the acquirers of foreign target firms between 1990-1999 and find no evidence on average of any statistically significant decrease in the excess value of the U.S. acquiring firms in 2 years surrounding the deal. Also they use similar valuation methodology as in Bodnar, Tang and Weintrop (2003) and Denis, Denis and Yost (2002), which represents a variation of the industry-matched multiplier approach. Their results advice that a cross border acquisition does no t result in value destruction. They find that related cross border mergers and acquisition does not lead to value destruction and unrelated cross border merger and acquisition leads to value destruction. Fatemi and Furtado (1988), Markides and Ittner (1994) and Datta and Puia (1995) all of which find either non-significant positive abnormal returns or, in the case of Datta and Puia, negative abnormal returns John Doukas And Nickolaos g. Travolis discuss how firms engaging in international expansion by acquiring foreign corporations with an intension to maximise shareloders wealth. Their results suggest that shareholders of firms not already operating in the target firms country get the best benefit from the acquisition, In terms of non-US countries, Kang (1993) investigates the abnormal returns of Japanese bidders in the US and finds positive abnormal returns to Japanese firms. Corhay and Rad (2000) find weak evidence that cross-border acquisitions are wealth -creating based on a sample of Dutch firms They also find evidence that the benefits from internalisation are greater for firms having less international exposure and making acquisitions outside their main industrial activity. In terms of cross-country comparisons, Eun et al. (1996) have shown that the returns to acquiring firms are likely to vary across countries. Examining Cross-border acquisitions in the US, they show that bidding firms sourced from Japan experienced positive abnormal returns while UK firms experienced considerable negative abnormal returns. Acquiring firms based in Canada experienced mildly positive abnormal returns that were considerably below those experienced by Japanese firms.4 Cakici et al. (1996) also report significantly positive abnormal returns around the event date for acquirers from Japan, Australia, the UK and the Netherlands. These studies suggest that positive abnormal returns are likely to vary depending upon the characteristics of the investing firms, the country of origin, and the country and/or industry in which the acquiring firm is investing in Hidden weaknesses/problems in acquired companies lead to over-optimistic expectations of the acquirer or failure to anticipate difficulties Strong internal/external pressures for swift decision-making encourage a financial focus as opposed to the assessment of crucial operational or cultural issues. Control by very few people with a limited time commitment or continuity throughout the pre- and post integration process. Frequently there is no a formal function/team taking responsibility to systematically control MA projects. Lack of processes in place to deal with the complex organisational dynamics necessary in pursuing MA synergies. Merged companies frequently take years to deliver full organisational integration. SOME MERGERS AND ACQUISITIONS Failure of General Motors (GM) AND Daewoo (one of the key players of the automotive industry) joint venture in 1980s was a result of differences in the approach of the managers. Daewoo executives wanted the venture to achieve net growth even thought the venture was running in net losses. But GM Wanted to reduce operations in order to increase the profits. eventually this led to a disagreement which was to be discontinued. This led to a great loss to bothd the companies in terms of investment and valuable time. This is a very good example of a friendly merger which can be unsuccessful due to changes in opinions.