Strategy
Ø An organizations ability to perform &
strenthen its long term competitive
position, to gain a competitive advantage
over its competitors
Ø It differenciate the organization from its
rivals
Types of Strategy’s
Ø Generic Competitive Strategy
Ø Complementary Strategy
Ø Functional-Area Strategy
Complementary Strategic Options
Ø Strategic alliance & Collaborative partnerships
Ø Mergers and acquisitions
Ø Forward integration & backward integration
Ø Outsourcing
Ø Offensive & Defensive Strategy
Benefits of Complementary Strategies
Shared Reduced cost & Shared Risk Increased
Resorces higher returns Customerbase & sales
Additional
Easy Financing
Expertise
Mergers & Acquisitions
Ø Mergers
Combine existing two businesses and form a single organization entity
Ø Acquisitions
One company purchases most or all of another company’s shares to gain the full
control.
Case Introduction – Brandix Lanka Ltd
v Company formed by merging Phoenix Ventures and the Jewelknit group
v Sri Lanka’s Single largest apparel exporter
v Work force of 14,400 employees
v Annual turnover of USD600 million
v 38 manufacturing facilities situated in Sri Lanka, India & Bangladesh
v Customer Portfolio - Victoria's Secret, Gap, Next and Marks and Spencer
Mergers – Brandix Lanka Ltd
Ø Brandix Lanka Ltd formed by merging Phoenix Ventures and the Jewelknit group.
Ø Vertical Integration – Jewelknit produces knitted wears and phoenix ventures
produces fabrics
Ø Backward Integration – Manufacturing company buys or take control of a company
which supplies products for manufacturing
Benefits to Brandix Lanka
Ø Economies of scale and reduced cost
Ø Increased manufacturing capacity
Ø Reduced cost in importing raw materials (fabrics)
Ø Minimized delay is receiving raw materials
Ø Oppurtunity to explore new markets
HR’s contribution in this merger
Three stage model for Mergers & Acquisitions
Ø Stage 1 – Pre-Combination
Process takes place before the M&A is completely legal
Ø Stage 2 – Combination
Focused on combining and integrating the companies
Ø Stage 3 - Solidification
Involves solidification and assessment of the new entity
HR’s contribution in this merger
Stage 1 – Pre-Combination
Ø Identify leaders from both companies for effective smooth transition and
communication
Ø Cultural assessment of both companies
Ø Creating training programme for learning and knowledge transafer
Ø Conducting thorough due diligence process in all vital areas
Ø Decide on composition of team
HR’s contribution in this merger
Stage 2 – Combination
Ø Ensure effective communication for smooth transformation
Ø Planning and managing the relocation
Ø Ensure Job security to employees to boost confidence
Ø Creating team design & selection
Ø Establishing new organization structure, culture, HR policies & practices
Ø Change management
HR’s contribution in this merger
Stage 3 - Solidification
Ø Change management
Ø Conduct orientation program on new policies,procedured & performance
management etc.
Ø Provide new job description to all employees
Ø Identify skills of people and assigne them accordingly
Ø Educate all employee on new remuneration and other benefits
Benefits of HR initiative during Mergers
Ø Ensure right talented people are retained and assigned to proper places
Ø Reduced employee conflicts and problems
Ø Ensuring enhanced confidence among the employees
Ø Reduced employee turnover
Ø Effectively manage the resistance to change
Ø Provide adequate training to employees
Ø Manage employee stress sothat it will not negativeley impact business
