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12/06 Warm-up

12/06 Warm-up. Describe ways to measure the size of a business. In terms its primary objective , explain why a business seeks to grow. $39 Billion. $182.4 Billion. U.S. Wireless Market Share. 12/07 Warm-up. Evaluate AT&T’s decision to use an acquisition as a growth strategy.

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12/06 Warm-up

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  1. 12/06 Warm-up • Describe ways to measure the size of a business. • In terms its primary objective, explain why a business seeks to grow.

  2. $39 Billion $182.4 Billion

  3. U.S. Wireless Market Share

  4. 12/07 Warm-up • Evaluate AT&T’s decision to use an acquisition as a growth strategy. • Consider the advantages & disadvantages of this strategy (use your notes!).

  5. Business Reasons for Acquisition Achieve Economies of Scale Gain Market Share Survive (Remain Competitive) Reduce Risk (Diversification) Increase Profit

  6. 1. Achieve Economies of Scale?

  7. 2. Gain Market Share?

  8. 3. Survive in a Competitive Market?

  9. 4. Diversification (Reduce Risk)?

  10. 5. Gain More Profit?

  11. Group Work • Read your article in order to identify stakeholder impact.

  12. Group Work • Stakeholder Analysis of Acquisition • Summarize impact on each stakeholder’s interests/needs based on; press release, article and group member’s opinions • Consider both short-term & long-term impact • Identify Stakeholder Conflicts • Groups whose interests/needs ARE being addressed by acquisition. • Groups whose interests ARE NOT being addressed by the acquisition.

  13. Department of Justice Review of Acquisition • Compare & contract AT&T’s business with T-Mobile’s • How do they satisfy & create customers? • Who are their customers? • Horizontal Mergers • Explain the government’s interest in evaluating a Horizontal Merger. • Why would the government block a merger? • What factors would the government consider in its decision?

  14. U.S. Wireless Market Share

  15. 12/9 Warm-up • Summarize the reasons why the Dept. of Justice (DOJ) would attempt to block a horizontal merger. • Read & Annotate your article, looking for evidence that could be used by the DOJ to block the AT&T / T-Mobile merger.

  16. 12/12 Warm-up • According to the article, describe the problems the business has experienced due to its growth strategy • Explain whether Cisco’s growth has allowed it to benefit from economies of scale.

  17. Dept. of Justice vs. AT&T • Plaintiff = DOJ • What will they prove? • Defendant = AT&T • What will they prove?

  18. Objectives • Explain the value of the Ansoff Matrix • Identify growth strategies for a given business situation.

  19. 12/13 Warm-up • Explain which growth strategy AT&T’s attempt to acquire T-Mobile represents on the Ansoff Matrix • Describe the level of risk associated with this strategy.

  20. Ansoff Matrix • Help business decide product & market growth strategies • Market new or existing products in new or existing markets • Set of growth strategies that set direction for business strategy

  21. Market PenetrationExisting Products into Existing Markets • Maintain or increase market share of existing products • Marketing strategies (4Ps) • Secure domination in growing market • Restructure a mature market • Aggressive marketing to drive-out competitors • Increase usage by existing customers • Loyalty schemes

  22. Market DevelopmentSell Existing Products in New Markets • New geographic markets • Target a Different Market Segment • New product dimensions or packaging • New distribution channels • New pricing

  23. Product DevelopmentIntroduce New Products to Existing Markets • Broaden appeal in existing markets • Modified Products • Develop new competencies

  24. DiversificationMarket New Products in New Markets • Very Risky • Expectations of gains • Evaluation of the risks

  25. 12/14 Warm-up • Describe how Starbucks achieved growth in the following areas of the Ansoff Matrix; • Market Penetration • Market Development

  26. Group Activity • Choose a business • Identify its Current Product & Current Markets • Identify & describe 4 growth strategies based on the 4 quadrants of the Ansoff Matrix.

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