Post-transaction brand and model line-up integration in the automotive industry: Case studies of European companies as target of acquisitions by Chinese and Indian multinational corporations

Corporations practice company acquisitions in order to create shareholder’s value. During the last few decades, the companies in emerging markets have become active in the acquisition business. During the last decade, large and significant acquisitions have occurred especially in automotive industry. While domestic markets have become too competitive and companies are lacking required capabilities, they seek possibilities to expand into Western markets by attaining valuable assets through acquisitions of developed country corporations. This study discusses the issues and characteristics of these acquisitions through case studies. The purpose of this study was to identify the acquisition motives and strategies for post-transaction brand and product integration as well as analyze the effect of the motives to the integration strategy. The cases chosen for the research were Chinese Geely acquiring Swedish Volvo in 2010 and Indian Tata Motors buying British Jaguar Land Rover in 2008. The main topics were chosen according to their significance for companies in automotive industry as well as those are most visible parts for consumers. The study is based on qualitative case study methods, analyzing secondary data from academic papers and news articles as well as companies’ own announcements e.g. stock exchange and press releases. The study finds that the companies in the cases mainly possessed asset-seeking and market-seeking motives. In addition, the findings refer to rather minimal post-acquisition brand and product integration strategies. Mainly the parent companies left the target company autonomous to make their own business strategies and decisions. The most noticeable integrations were in the product development and production processes. Through restructuring the product architectures, the companies were able to share components and technology between product families and brands, which results in cutting down costs and in increase of profitability and efficiency. In the Geely- Volvo case, the strategy focused more on component sharing and product development know-how, whereas in Tata Motors-Jaguar Land Rover case, the main actions were to cut down costs through component sharing and combine production and distribution networks especially in Asian markets. However, it was evident that in both cases the integration and technology sharing were executed cautiously to prevent on harming the valuable image of the luxury brand. This study has concluded that the asset-seeking motives have significant influence on the posttransaction brand and model line-up integration strategies. By taking a cautious approach in acquiring assets, such as luxury brand, the companies in the cases have implemented a successful post-acquisition strategy and managed to create value for the shareholders at least in short-term. Yritykset harjoittavat yritysostoja luodakseen osakkeenomistajille lisäarvoa. Viimeisten muutamien vuosikymmenien aikana yritykset kehittyvissä maissa ovat myös aktivoituneet yritysostoissa. Viimeisen vuosikymmenen aikana erityisesti autoteollisuudessa on esiintynyt suuria ja merkittäviä yritysostoja. Koska kilpailu kotimaan markkinoilla on kiristynyt ja yritykset ovat vailla vaadittavia valmiuksia, ne etsivät mahdollisuuksiaan laajentaa länsimaisiin markkinoihin hankkimalla arvokkaita etuja kehittyneiden maiden yrityksistä yritysostojen avulla. Tämä tutkimus pohtii näiden yritysostojen olennaisia kysymyksiä ja ominaisuuksia casetutkimuksien kautta. Tutkimuksen tarkoitus oli tunnistaa sekä yritysostojen motiiveja ja brändi- ja mallisto-integraation strategioita että analysoida kyseisten motiivien vaikutusta integraatiostrategiaan. Tapaus-tutkimuksiksi valittiin kiinalaisen Geelyn yritysosto ruotsalaisesta Volvosta vuonna 2010 ja intialaisen Tata Motorsin yritysosto englantilaisesta Jaguar Land Roverista vuonna 2008. Tutkimus on kvalitatiivinen case-tutkimus ja siinä analysoidaan toissijaista tietoa sekä akateemisten ja uutisartikkeleiden että yritysten omien ilmoitusten, kuten pörssi- ja lehdistötiedotteiden, kautta. Tutkimuksen tulokset osoittavat, että tutkittujen yritysten toiminnat perustuivat motiiveihin, joita ajoivat etujen and uusien markkinoiden tarve. Sen lisäksi tutkimustulokset osoittivat, että yritysoston jälkeinen brändi- ja mallisto-integraatio pidettiin minimaalisena. Pääasiallisesti kohdeyrityksille jätettiin autonomia tehdä omat liikkeenjohdolliset päätökset yritysstrategioihin liittyen. Huomattavimmat integraatiot koskivat tuotekehityksellisiä ja tuotannollisia prosesseja. Kehittämällä uudelleen tuotearkkitehtuureja, yritykset pystyivät jakamaan komponentteja ja teknologiaa tuoteperheiden ja brändien välillä. Tämä mahdollisti kustannusleikkauksia sekä kannattavuuden ja tehokkuuden parantamista. Geely-Volvo –tapauksessa integraatiostrategia keskittyi komponenttien jakamiseen yhteisten tuotearkkitehtuurien avulla ja tuotekehityksen ammattitaitoon, kun taas Tata Motors-JLR –tapauksessa päätoiminnat olivat kustannuksien leikkaus sekä tuotannon ja jakeluverkoston yhdistäminen erityisesti Aasian maissa. Yhteistä yrityskaupoissa oli, että brändi- ja mallisto-integraatio sekä teknologian jakaminen suoritettiin varoen ehkäistäkseen arvokkaiden luksus-brändien tuotekuvan vahingoittamista. Tutkimuksen lopputulokset osoittavat, että yrityskaupan motiiveilla on huomattava vaikutus brändija mallisto-integraation strategiaan. Toteuttamalla varovaista lähestymistapaa luksus-brändin hankinnassa ja integraatiossa, yritykset ovat onnistuneet luomaan lisäarvoa osakkeenomistajille vähintään lyhyellä aikavälillä.

Modelling the simultaneous effects of intellectual capital and knowledge management on the organisational performance of Finnish companies

The aim of this study was to contribute to the current knowledge-based theory by focusing on a research gap that exists in the empirically proven determination of the simultaneous but differentiable effects of intellectual capital (IC) assets and knowledge management (KM) practices on organisational performance (OP). The analysis was built on the past research and theoreticised interactions between the latent constructs specified using the survey-based items that were measured from a sample of Finnish companies for IC and KM and the dependent construct for OP determined using information available from financial databases. Two widely used and commonly recommended measures in the literature on management science, i.e. the return on total assets (ROA) and the return on equity (ROE), were calculated for OP. Thus the investigation of the relationship between IC and KM impacting OP in relation to the hypotheses founded was possible to conduct using objectively derived performance indicators. Using financial OP measures also strengthened the dynamic features of data needed in analysing simultaneous and causal dependences between the modelled constructs specified using structural path models. The estimates were obtained for the parameters of structural path models using a partial least squares-based regression estimator. Results showed that the path dependencies between IC and OP or KM and OP were always insignificant when analysed separate to any other interactions or indirect effects caused by simultaneous modelling and regardless of the OP measure used that was either ROA or ROE. The dependency between the constructs for KM and IC appeared to be very strong and was always significant when modelled simultaneously with other possible interactions between the constructs and using either ROA or ROE to define OP. This study, however, did not find statistically unambiguous evidence for proving the hypothesised causal mediation effects suggesting, for instance, that the effects of KM practices on OP are mediated by the IC assets. Due to the fact that some indication about the fluctuations of causal effects was assessed, it was concluded that further studies are needed for verifying the fundamental and likely hidden causal effects between the constructs of interest. Therefore, it was also recommended that complementary modelling and data processing measures be conducted for elucidating whether the mediation effects occur between IC, KM and OP, the verification of which requires further investigations of measured items and can be build on the findings of this study.

Export subsidies, countervailing duties, and welfare

Using a simple Cournot duopoly model, this paper provides an important policy implication for trade disputes involving export subsidies. In this paper, the possibility that a foreign export subsidy could benefit the domestic country as well as the foreign country by appropriately using countervailing duties is identified.

The impact of companies’ demergers to the stock prices: a Finnish perspective

Tässä kauppatieteiden kandidaatintyössä tutkittiin millaisia vaikutuksia julkisesti noteerattujen yhtiöiden osakekurssissa tapahtuu, kun jo valmiiksi Helsingin pörssissä listattu yritys jakautuu kahdeksi uudeksi pörssiyritykseksi. Molempien yrityksien osakkeita voi tämän jakautumisen jälkeen vapaasti ostaa tai myydä. Aikaisempi tutkimus on pääsääntöisesti keskittynyt Yhdysvaltojen markkinoille ja näiden tutkimusten tuloksien perusteella on monessa tapauksessa havautta, että on mahdollista saavuttaa ylinormaaleja tuottoja, kun pörssiyritys jakautuu kahdeksi uudeksi pörssiyritykseksi. Tässä analyysissä jakautumiset ajallisesti tapahtuivat vuosien 1994 ja 2013 välisenä aikana Suomessa ja näitä jakautumia oli yhteensä 16 kappaletta. Tutkimuksessa on hyödynnetty tilastollisten menetelmien analyysiä sekä CAP-mallia, jotta voitaisiin löytää vastauksia seuraaviin kysymyksiin: Vaikuttaako pörssiyrityksen jakautuminen kahdeksi pörssiyritykseksi alkuperäisen yhtiön ja uuden yhtiön osakekursseihin? Onko vaikutus positiivinen, negatiivinen vai onko jakautumisella mitään havaittavaa vaikutusta? Tämän tutkimuksen tulokset antavat uutta tietoa tutkijoille, analyytikoille, opettajille, opiskelijoille, yrityksille ja yritysten johdolle sekä erityisesti sijoittajille. Tulosten mukaan on nähtävissä monia vaikutuksia osakekursseissa, kun pörssiyritys jakautuu. Vaikutus näyttää kuitenkin olevan jossain määrin yritys-riippuvainen. Kun sijoitetaan oikeaan aikaan, on monia jakautuvia yrityksiä, jotka antavat hyvän tuoton keskimäärin, mutta kuten tavallista ja tyypillistä osakemarkkinoille, on myös jakautuvia yhtiöitä, jotka antavat negatiivisia tuottoja tai tuotot ovat nollassa

Customer Value Creation in Born Global Companies

The purpose of this master's thesis is to study customer value creation in born global companies. The main objective is to identify the types of value enabling customer value creation in born global companies, and to establish their relative importance. After an introduction to the born global academic literature and the customer value creation literature, the empirical part consists of a multiple case study, examining the state of customer value creation in the case companies, along with the subsequent analysis. The results of this research indicate that high-tech born global companies perceive customer value creation as a crucial function of their operations, but their value creation thinking is often one-dimensional. Technology based born globals often place high value on the product and the technology behind it, mainly striving to incorporate performance- and relationship value in their value offerings, but they're unable to utilize their opportunity creation to the fullest, and they lag behind their more established competitors that are able to diversify their value offerings.

Rethinking "energy nationalism": a study of the relationship between nation states and companies in the oil industry

ABSTRACTThe term "energy nationalism" is frequently used by academic literature and media, but usually without adequate conceptual accuracy. Despite this, a set of papers deepens the discussion on the relationship between nation states and the energy industry, especially the oil sector. These papers allow identifying fundamental elements to understand the energy nationalism, either complementary or divergent between each other. Thus, this study aims at presenting an interpretation of the concept that fills the gaps left by the above mentioned literature based on a global analysis of the oil industry structure and its historical evolution since the mid-19thcentury.

THE ADAPTATION PROCESS AND CHALLENGES OF EDUCATION EXPORT

The purpose of this study is to investigate the challenges of the adaptation process of education export. The research is conducted as a single case study that concentrates on three education export projects. The case company in the research is Team Academy. The study goes through the different forms of education export, the adaptation of education export and the challenges of the education export –process by means of theory and empirical data. The research is carried out as a qualitative research and the method used is a qualitative content analysis. More specifically the research is an abductive content analysis. The research data is collected in four in-depth interviews from Team academy representatives who have been strongly involved in certain education export –project of Team Academy. The research confirms the theory in the challenge of hierarchy, funding and registration issues, and refutes it in the challenge of competition, legislation, different governmental attitudes and knowledge in productization. The main challenges of the adaptation process are related to funding, differences in values, sudden changes, the complex nature of the learning model, concept of time, teamwork as method and accreditation. It is highlighted that in the future operations, anticipating problems that arise from for example cultural differences and differences in values, communication, managing the money flows and the company form is recommended. Future research could continue with investigating the suitable company form for education exports of this kind, and how to stand out and communicate when operating under another institution. It is considered a potential risk that a brand encloses the brand that operates under it.

In search of the interrelatedness of innovation and internationalisation processes in entrepreneurial life science companies

This study is motivated by the question how resource scarce innovative entrepreneurial companies seek and leverage global resources. This study takes a resource-seeking perspective a step forward and suggests that resources that enable the entrepreneurial internationalisation are largely accrued from the early stages of entrepreneurial life; that is from the innovation development. Consequently, this study seeks to explain how innovation and internationalisation processes are interrelated in the entrepreneurial internationalisation. This main objective is approached through three research questions, (1) What role do inter-organisational relationships in innovation have in the entrepreneurial internationalisation process? (2) What kind of inward–outward links do inter-organisational relationships create in the resource-seeking-based entrepreneurial internationalisation process? (3) What kind of capability to collaborate forms in the interaction of inter-organisational relationship deployment? The research design is a mixed methods design that consists of quantitative pilot study and qualitative multiple case study of five entrepreneurial life science companies from Finland and Austria. The findings show that innovation and internationalisation processes are tightly interwoven in pre-internationalisation state. The findings also reveal that the more experienced companies are able to take advantage of complexcross-border inter-organisational relationship structures better than the starting companies. However, very minor evidence was found on inward links translating into outward links in the entrepreneurial internationalisation process, despite the expectation to observe more of these links in the data. Combined intangible-tangible resource-seeking was the most preferred to build links between inward–outward internationalisation but also to develop competence to collaborate. By adopting a resource- instead of market-seeking approach, this study illustrated that internationalisation extends to early stages of innovative companies, and that in high-technology companies’ potentially significant cross-border relationships have started to form long before incorporation. Therefore, these observations justified the firmer inclusion of pre-company history in innovative entrepreneurship studies. The study offers a conceptualisation of entrepreneurial internationalisation that is perceived as a process. The main theoretical contributions are in the areas of international entrepreneurship and in the behavioural process studies of entrepreneurial internationalisation and resource-based internationalisation. The inclusion of the innovation-based discussion, namely the innovation process, in the internationalisation process theories has clearly contributed to the understanding of entrepreneurial internationalisation in the context of international entrepreneurship. Innovation development is a central act of entrepreneurial companies, and neglecting innovation process investigation from entrepreneurial internationalisation leaves potentially influential mechanisms unexplored.

The best practices in the formation phase of Sino-Finnish joint ventures in China: For Finnish software companies

This study discusses the formation phase of Chinese-Finnish joint ventures in China. The purpose of this thesis is to create best practices for Finnish software companies in forming a joint venture with a local Chinese company in China. Therefore, the main research question, in what are the best practices for forming Sino-Finnish joint ventures in China for Finnish software firms, is examined through four different themes within the joint venture formation phase; the motives, the partner se-lection, the choice of a joint venture type and joint venture negotiations. The theoretical background of the study consists of literature relating to the establishment process of Sino-Western joint ventures in China. The empirical research conducted for this study is based on the expert interviews. The empirical data was gathered via nine semi-structured interviews with both Chinese and Finnish experts in software and technology industry, who have experience or knowledge in establishing Sino-Finnish joint ventures in China. Thematic analysis was used to cat-egorize and interpret the interview data. In addition, a thematic network was built to act as a basis of the analysis. According to the main findings, the main motives for Finnish software companies to establish a joint venture in China are lack of skills or experience, little resources to enter on their own, and China’s large market. The main motives for Chinese companies are to gain new technology or man-agerial skills, and expand internationally. The intellectual property rights (IPR) have recently im-proved a lot in China, but the Finnish companies’ knowledge on IPR is inadequate. The Finnish software companies should conduct a market and industry research in order to understand their po-sition in the market and to find a suitable location and potential joint venture partners. It is essential to define partner selection criteria and partner attributes. In addition, it is important to build the joint venture around complementary motives and a win-win situation between the joint venture partners. The Finnish companies should be prepared that the joint venture negotiations will be challenging and they will take a long time. The challenges can be overcome by gaining understanding about the Chinese culture and business environment. The findings of this study enhance understanding of the joint venture formation phase in China. This study provides guidelines for Finnish software companies to establish a joint venture in China. In addition, this study brings new insights to the Sino-Western joint venture literature with its soft-ware industry context. Future research is, however, necessary in order to gain an understanding of the advantages and disadvantages of a joint venture as an entry mode into China for Finnish soft-ware companies.

Integration of Logistics Systems across Companies’ Borders

The growth of the companies working in the Logistics area has raised the need for using several Logistics systems that can meet the increased requirements in business processes. Different companies may use one or more Logistics systems internally and may use different Logistics systems that other collaborated companies use. Furthermore, these Logistics systems are required to communicate with each other in order to process and manage the flow of the information. Integrating the Logistics systems is beneficial as it allows interaction between the whole systems and services instead of the need to replace them. In addition, it improves the efficiency, lowers the possible errors in the supply chain, reduces the costs and facilitates the access of suppliers and customers to the information. This in turn leads to better relationships with both suppliers and customers. Usually local integration of several Logistics systems is not very difficult, especially that mostly the companies buy their system from a single source. However, the case is different for integrating several logistics systems across the companies’ borders. In this case, there are many factors play major roles in limiting the integration, such as using different systems and different output. This thesis highlights these factors and challenges, demonstrates some solutions for the logistics inter-organizational integration from the perspective of information systems and presents some approaches for integrating these systems. There are many studies about the integration inside a company but fewer studies focused about the technical side and the information systems integration across company’s borders or what is called inter-organizational integration. This study is a literature review that aims at illustrating the challenges, the requirements and some approaches in inter-organizational logistics information systems integration of logistics systems across the companies’ borders.

Distribution of Smart Solutions for External Lighting in Switzerland - Case C2 Smartlight Ltd.

Establishing of export operations is the key to the competitiveness for all producing companies in high-tech industry. Distribution partnerships between exporting producer and local distributors of relevant foreign market are utilized by SMEs to gain cost-efficiency of operation. The purpose of this study was to investigate the Swiss market of outdoor lighting solutions and propose distribution channels for the case of company C2 SmartLight Ltd. The literature framework consists of three main parts: description of distribution channels for business products, the selection process of the distributor and management of the distributors. The empirical part of this study composed of the observation of Swiss lighting market, highlighting key customers, trends of energy efficiency and key industry players of the lighting market. The aim was to identify potential distribution channels, which reach the target customer groups and identify the market opportunity. Secondly, the data was collected through semi-structured phone interviews. The company, which operates in outdoor lighting business and has an established distributor in Switzerland, was interviewed and used as a benchmark. As a result of this research the market opportunity for distribution of C2 SmartLight products was identified based on potential customers and market need. C2 SmartLight Ltd. should establish a connection with wholesalers that distribute easy to handle and store electrical equipment. The results of this study can be used by other SME companies, operating in a similar field of economy, for selection of distributors.

Risk management in transportation companies: Russian and Finnish practices

Development of risk management practices became significant part of transportation companies’ strategy. Evolution from insurance management into enterprise risk management (ERM) led to development of risk management tools and methods. The purpose of this thesis is to design technique for evaluation of risk management practices of national transportation companies. The empirical research is made on the example of Russian and Finnish transportation companies. The required data was conducted with a help of survey. The result of the thesis is designed technique for risk management practices evaluation that allows to compare practices of different countries and organizations with different characteristics. The Master thesis has novelty in theoretical and practical contribution. It was designed new technique based on realization of the method of APIS. Moreover, it has practical implication as managers can utilize this method for comparison of practices between different countries, different organization and even different units within particular organization.

POLITICAL ENVIRONMENT AND BUSINESS DEVELOPMENT IN THE ARCTIC Strategic opportunities and threats for Finnish companies

The Arctic environment is changing constantly. There are several factors that constitute to the rate and immensity of the development. The region differs from the surrounding markets that most of the countries in the region have been used to. Therefore the purpose of the study was to understand how the political environment affects Finnish companies’ strategies and business operations. The issues analyzed were the political environment in the region, the business environment and economic development, and the opportunities and threats that the Finnish companies have in Arctic. The main theories were found from strategic management and market analysis tools. The different theories and definitions were gone through in order to understand the context of the study. This is a qualitative study that uses content analysis as its main method of analyzing the data. Therefore the data analyzed was gathered from already existing material and it was analyzed until the saturation point was found. This was done in order to minimize the risks related to using secondary data. The data collected was then categorized into themes accordingly. First the general political environment in the Arctic was studied, especially the Arctic Council and its work as the main political entity. From there the focus shifted to the business environment and the general opportunities and threats that are found from Arctic economic development. China offered another point of view to this as it represented a non-Arctic state with a keen interest on the region. Lastly the two previous objectives were combined and looked through from a Finnish perspective. Finnish companies have a great starting point to Arctic business and the operational business environment gives them the framework with which they have to operate in. As a conclusion it can be said that there are three main factors leading the Arctic economic development; the climate change, the development of technology, and the political environment. These set the framework with which the companies operating in the region must comply with. The industry that is likely to lead the development is the marine industry. Furthermore it became evident that the Finnish companies operating in the Arctic face many opportunities as well as threats which can be utilized, taken advantage of or controlled through effective strategic management. The key characteristics needed in the region are openness and understanding of the challenging environment and the ability to face and manage the arising challenges.