prof Sonali

M&A

BCG Matrix

3/30/2012

Stars
2

An Acquirer should try to identify such divisions in the market and if possible acquire them at all costs

prof Sonali

M&A

3/30/2012

Dogs
3

Avoid Buying it

prof Sonali

M&A

3/30/2012

GE Matrix
4

Market High growth Rate Mediu m Low

Winner Winner Profit Producer

Winner Average Business Loser

Question Mark Loser Loser

Good

Medium

Low

Competitive Position

prof Sonali

M&A

3/30/2012

Strategy
5

The GE matrix is a very reliable tool of implementing and managing a firms diversification strategy The acquirer can analyze the growth prospects of the firms business and plan the resource deployment strategy of the entity with the objective of maximizing performance The matrix suggests that an entity should invests in winners and question where the industry attractiveness and competitive position are both favourable It should maintain market position of average business and Profit producers .

prof Sonali

M&A

3/30/2012

Sell losers For e.g. Unilever undertook a major exercise of assessing its business portfolio . Based on the results it decided to sell off several specialty chemical units that were not contributing to firms profitability The resources generated through such divestitures were used to acquire related businesses like Ben and Jerrys ,Homemade and Slim-Fast

prof Sonali

M&A

3/30/2012

Porters Five Forces Model

7

Porter states hat the fundamental issue for a diversified company is selection of industries in which the company should compete . This becomes critical issue while targeting companies for mergers ,acquisitions and diversification.

prof Sonali

M&A

3/30/2012

References
8

Mergers and Acquisitions Rajinder Arora

prof Sonali

M&A

3/30/2012