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revitalizing a French conglomerate

Vivendi

o o o o o

Click to edit Master subtitle style Group 6 Heena Puja Roy Rishi Aranganathan
A group presentation in Business Strategy II

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Inception of Vivendi

Inception 1853 A water company -Compagnie Gnrale des Eaux created by Napoleon III Initially focused on Water Sector, waste management, 1976 CEO Guy Dejouany 1980s - Diversification started 1996 - Jean-Marie Messier appointed as new CEO Group changed name and become

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Compagnie Gnrale des Eaux VEVENDI CONGLOMERATE

Series of acquisitions, in 2002 total of 14,000 companies worldwide Formation of VIVENDI UNIVERSAL And Communications

o Media 4/29/12

Objectives

Revenues in Communication sector Equal the Environmental sector To strengthen its world leadership in environmental services To become a major Global Player in Media and communications Financed by the VE cash flow

Underline assumption that every household will have high speed 4/29/12

Vivendi Revenue by sector in 2001

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Vivendi sector wise profit in 2001

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Integration problem

CEO Messier compromised the interests of shareholders


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Messier a man with dual faces

In one hand Messier was taken as a modern, approachable Chief Executive who believed in Collegial - participative management style q Inside the company, he appeared as authoritarian and sometimes even cutting, his removal of popular head of Canal Plus, Pierre Lescure, resulting a virtual revolt within the company 4/29/12
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Competition by Sector

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Fall of Vivendi Universal

2001- sever drop in the valuation of Telecom & Internet Industry During this time, long awaited revision in GAAP of US and French accounting system introduce, it prohibited amortization of Goodwill and indefinite lived other intangible assets 2002- Vivendi had to take a 17 billion Euro Goodwill impairment charge against income, caused a loss of 17billion Euro for the company Slump in share prices create a cash crisis for Vivendi, a large portion of 17 billion euro debt was structured as Bonds in convertible and exchangeable for equity manner
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Moodys downgraded debt rating of Vivendi as

Vivendis Income loss

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Vivendis stock price decline

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Messier vs. vivendi

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Why SEAGRAM ?
Messier wanted to make Vivendi the biggest Entertainment and Media company in the World v Messier being an Investor Banker, wanted to acquire big names v Always wanted to be in the limelight v 4/29/12 Wanted to venture out of Europe
v

BCG Matrix

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Growth Vector Analysis

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Growth Vector Analysis of 2000-02

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Porter Analysis 1

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Porter Analysis 2

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Value Chain Analysis

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Financial Ratio Profile

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Space Analysis

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Management & Leadership

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Swat analysis 2000

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Vivendi capability profile

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Life Cycle

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Vivendi as of march 2009

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Conclusion
There were lack of synergy in its activities qActivities are at two different level in the life cycle qManagement issues US vs. Europe qVivendi needs to concentrate either US or Click to edit Master subtitle style Europe qVivendi should monetize part of activities, may be US Entertainment assets
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Thank you
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