Nov 03 2005
IBUS 579 Final
1. IP risk
60% R&D overseas, 80% sales overseas. once your PRODUCT is on market, you are “naked”.
2. Manufacturing, Purchasing, Supply Chain
Number of employees 30% outside UK, implied overseas manufacturing (see also j.v. with Singapore)
3. Currency Risk
Expanding oversea exposure. The developing, emerging markets are the future and point of growth
4. Marketing
Government dependent, large projects, lead into new emerging market.
5. International Product Dev.
Middle level: They have already done heavy portion. so should have pretty good expereinces. No negative. Among developed country.
6. Reputation and social responsibility
Low.
Acquisition:
Allison: Good, Access to Market,
Vickers: Good, Access to Market, New Product/Tech
Coopers: ?, Access to Market, technology
Parsons: ?
Future recommendations
1. Compare acquisition. vs. Joint Venture
2. Vertical vs. Horizontal, Core competence
3. Buy competitors or startups?
4. Cost of integration
5. Position (marketing,productivity, barrier to entry) change
6. Risk/hedging against
Recommendation:
1. Energy/Hybrid/Fuel cell/Nuclear/Wind/Oil Refinery/Airplane services
2. Pratt Witney
Oil Opportunity vs. Risk
1. Why risk:
a. High priced, currency pressure
b. Decreased demand for big engine
c. Reduced demand for oil will reduce on transportation
2. Short-term opportunity but could be long term risk
3. Alternative energies