Unit 1 Alliances
To merge or not to merge?
After crisis of 2008 financial climate has changed radically. The business was shrinking and companies have changed methods of doing business to strengthen their positions.
One of the most popular ways to survive is creating of business alliances. Even today the headline of business newspapers usually announces some kind of M&A. Deals can be worth hundreds of millions, or even billions dollars.
The main idea of strategic alliances is combination of several companies into one larger company and creating shareholder value over and above of the sum of these companies. Eventually, we have more competitive company in result. There are different ways in which this idea can be executed, f.e. M&A.
The terms M&A mean slightly different things. Whether a purchase is considered a merger or an acquisition really depends on whether the purchase is friendly or hostile and how it’s announced. In practice, mergers don’t happen very often & target company doesn’t want to be purchased. Achieving acquisition success has proven to be very difficult, while various studies have showed that only 50% of acquisitions were successful. The problem lies in conflicting approaches to different aspects of doing business.
In spite of this fact, I think that M is really good idea. It’s right way to improve company’s performance and make a larger profit if companies are able to integrate their systems and cultures. There are different ways of teamworking. People should manage to build relationships with their new colleagues and have human contacts.
A good example of merger is merger of Vympelkom and Kievstar in 2009. VimpelCom Ltd. holding company was founded in 2009. In 2009, Telenor and Alfa agreed to merge their assets in VimpelCom and Kyivstar with the aim of creating VimpelCom Ltd. In 2010 the ticker “VIP” was transferred from OJSC VimpelCom to VimpelCom Ltd. VimpelCom Ltd is a global provider of telecommunication services based in Amsterdam. It is the sixth largest mobile network operator in the world by subscribers with 214 million customers in 18 countries. A lion's share of the company's revenue comes from Russia (39%) and Italy (31%). VimpelCom's brands include "Beeline" (in Russia and CIS), "Kyivstar" (in Ukraine), "Wind" (in Italy and Canada), "Djezzy" (in Algeria), "Mobilink" (in Pakistan), "Banglalink" (in Bangladesh), and others.
That’s why the answer for this question is clear for me. To merge, because successful merger is a rarity though not a singularity.
Unit 2 Projects
Score twice before you cut once
A project is a complex series of tasks that have to be completed within a specific time period and with limited financial resources. Successfully managing a project involves estimating and controlling the resources, budget and time schedule necessary for a positive outcome. Starting with the specifications of a project, project managers put together a project plan which will enable them to complete the work on time and on budget.
All projects follow a life cycle which has 4 parts: initiating, plan, execute/control, close. Having mission to accomplish, first of all one should have an idea and select the project team. Then the plan is made: the risk factors are evaluated, costs are forecasted and the project is validated. After that a pilot project may be launched and project managers allocate resources, obtain status reports and control the project. Finally one should prepare a project overview and review the results.
British Airport Authorities' (BAA) T5 Agreement is a very good example of managing the project. This is Heathrow airport's fifth terminal. Besides the huge size this project involved some principal difficulties such as tricky building techniques, the need to connect with other transport links and to install sophisticated electronics. That is why to complete it on time and on budget BAA had to tackle it in novel way.
First, BAA chose the unusual way of running such huge project, refusing outsourcing. Second, "car industry logistics" was used and large investment in computing and training was made. But biggest novelty was the T5 Agreement - the contract with the main project's suppliers, companies, subcontractors in order to minimize the conflicts and hidden cost-cutting.
Usually suppliers rely on some glitches and delays to increase prices dramatically. And if something goes wrong, the work stops for weeks and even more. Under the T5 Agreement, BAA made a fund that would be shared among al its suppliers if the project finished on time and budget. And the risk of corner-cutting was eliminated as T5's suppliers were partners who would work on future projects and had an incentive to do a good job.
Another example of successful project accomplishing showed Infineon chips manufacturer. It produced chips at its J factories in Europe and Asia according to orders and made internal test of chips. Once the Infineon had to increase its production levels and subsequently tests. The problem was that there was no additional testing equipment. Infineon's managers offered some project options: to purchase additional testing machinery, to make testing externally and use outside company, to set a new centralized testing plant. But the company launched the most feasible and cost-effective project - it "offloaded" testing to the factories that had excess capacity. So most obvious solutions are not always best.
But not all projects are so successful. There are many projects not made in proper way because of some problems with managing complexity, suppliers and customers, allocating resources, coming up with plan, controlling the process and estimating funds and time. For instance Athens underground rail system failed to be on time and on budget because of complexity and additional costs.
The reasons of project success are surprisingly numerous. Even culture matters. Deadline respective cultures are Japan, China, Great Britain. Among the cultures, where the attitude to time limits are not so responsible is Russia.
In conclusion I'd like to say I believe that when you set goals you should always be sure that they are realistic, precise and timed and you should do as much as possible to achieve these goals! There is no golden rule for project, because the nature of all projects is that they’re fluid – you just can’t predict exactly what will happen. That’s why score twice before you cut once.