CRSFM Session 1.pptx

8/12/2019 CRSFM Session 1.pptx

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Corporate Restructuring and

Strategic Financial ManagementCRSFM

Saurav Snehvrat

Trimester VI


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Class Structure:

Sl. Topic Area

Class

Hours

1. Introduction - Strategy 2

2.

Introduction - Strategic Financial

Management 2

3.Corporate Restructuring - Meaning,Types 2

4.

Financial Restructuring - Capital

Structure 2

5. Mergers 2

6. Acquisitions 2

7. Buyouts 2

8. Management Control 2


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Class Structure:

9. Takeovers 2

10. Valuation of Firm - Enterprise Value 3

11. Divestitures - Why and How 3

12. Managing Bankruptcy 3

13. Problem Solving and Practice 3

14. Case Discussion & Presentation 2

Total Class Hours 32


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Scoring Structure:

1. Class Attendance 10

2. Class Participation 5

3. Mid Trimester Test 20

4. Project Presentation 15

5. Final Exam 50

Total 100


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Stake holders and Share holders

Investopedia:

A shareholder owns part of a company through stock

ownership

A Stakeholder is interested in the performance of a company

for reasons other than just stock appreciation.

Shareholders are Stakeholders but Stakeholders are not

always shareholders.


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What is Strategy?

Michael E Porter on competitive strategy:

A combination of the ends (goals) for which the firm is striving

and the means (policies) by which it is seeking to get there..

Johnson and Scholes

Strategy is the direct ion and scopeof an organization over

the long-term:which achieves advantage for the organisation

through its configuration of resourceswithin a

challenging envi ronment, to meet the needs of marketsand

to fulfill stakeholderexpectations.


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What is Strategy?...features

Strategy is about winningimportant for success

Strategy is about being different from your competitors.

Strategy is long term, directional and large scale.

Strategy aims to provide sustainable advantage to the firm.

Strategys scope covers all organizational activities: Planning,

Directing, Organizing and Controlling.

Strategy leverages the unique set of resources a company

has.


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Hence.

Strategy requires significant change.

Strategy always deals with uncertainty.

It affects every aspect of operations.

Strategies can become complex.

Strategic decisions are generally very tough to reverse in the

short to middle term.


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What a strategy is not?

Strategy is not a plan. Why?

Strategy is not a tactic. Why?

Strategy is not a SWOT analysis.

Strategy is not just a vision or mission statement.

Strategy is not a PEST analysis.


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Where to find the strategy of the firm?

In the heads of CEOs and senior management.

Speeches and documents of the firm.

Decisions through which the strategy is executed.

Hierarchy of strategy statements:

Mission statement: Why we exist? Purpose.

Vision statement: What we want to be?

Values/principles statement: What we believe in and how we

will behave?

Strategy statement:

What will be the competitive game plan?

- objectives

- scope (where will we compete)

- advantage (how will we compete)


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Example of strategy statement:

Apple Inc.: Business Strategy

The company is committed to bringing the best personal

computing and music experience to students, educators,creative professionals, businesses, government agencies and

consumersthrough its innovative hardware, software

peripherals, service and internet offerings. The companys

business strategy leverages its unique ability through the

design and development of its own operating system,

hardware, and many software applications and technologies,to bring to its customers new products and solutions with

superior ease of use, seamless integration, and innovative

industrial design. The company believes continual investment

in R&D and is critical to facilitate innovation of new and

improved products and technologies. The companys

strategy also includes expanding its distribution network to

reach more of its targeted customers effectively and provide

them a high quality sales and after sales support experience.


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Exercise I: Match the following

Be healthy and fit.

To run the London marathon.

Lose weight and strengthen

muscles.

Proximity to a fitness centre, a

successful diet.

Lose 5 kilos by Sept 1.

Exercise regularly, compete in

marathons, stick to appropriate

diet.

Join a fitness club.

Monitor weight, kilometres

run, measure times and

adjust.

Goal.

Mission.

Vision.

Objective.

Strategic

Capability.

Business Model.

Strategies.

Control.


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Exercise I: Answers(Johnson, Scholl and Whittington)


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Exercise II: Match the following

Empowering everyone live their dreams.

Create unmatched value for everyone through

dependable, effective, transparent and profitable

life insurance and pension plans.

Reliance Life Insurance would strive hard to achieve the 3

goals mentioned below:

Emerge as transnational Life Insurer of global scale and

standard

Create best value for Customers, Shareholders and all

Stake holders

Achieve impeccable reputation and credentials through

best business practices

Vision.

Mission.

Goal.

Strategy.

1. Retention of its existing 90 lakh customers;

2. Minimising mis-selling and orphan policies;

and three

3. Offering the security of regular salaries for its

agents, a first-of-its-kind initiative in India Operating

Strategy.


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Basic Components of Strategy

RATE OF RETURN >

COST OF CAPITAL

How do we make

money?

COMPETITIVE

ADVANTAGE

How should we

compete?

INDUSTRY

ATTRACTIVENESS

Which industries

should we be in ?

CORPORATE

STRATEGY

BUSINESS

STRATEGY


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Levels of Strategy Corporate level

Determine overall scope of the organisation

Add value to the different business units

Meet expectations of stakeholders

Business level (SBU)

How to compete successfully in particular markets Operational

How different parts of organisation deliver strategy


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Evolution of strategic management

FINANCIAL

BUDGETINGDCF based capital

budgeting

Financial Control

through operating

budgets.

CORPORATE

PLANNINGMedium term

forecasting

Diversification and

synergy

1950 1960

STRATEGY AS

POSITIONING

Industry Analysis

Market

Segmentation

COMPETITIVE

ADVANTAGE

Resources and

CapabilitiesShareholder Value

Maximization

Alliances

1970 1980 1990


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Evolution of strategic management

STRATEGY FOR

THE NEW

ECONOMYDisruptive

Technology

Strategic Innovation

STRATEGY IN THE

NEW MILLENIUM

CSR, business

ethicsGlobal strategies

Winner take all

strategies

2000 2009


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Exhibit 1.3 Johnson, Scholl and Whittington

A model of the elements of strategic management


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Strategic management

Strategic Management is the set of

managerial decisions and actions thatdetermine the long run performance of an

organization. It includes:

Environmental and Internal Scanning

Strategy Formulation

Strategy Implementation

Evaluation and Control- Wheelen and Hunger


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What are the key forces

of a successful strategy?

Successful strategy

Effective Implementation

Simple,

consistent, long

term goals

Profound

understanding of the

competitive

environment

Objective

appraisal of

resources

CRSFM Session 1.pptx

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