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Post-Acquisition Integration Simulation

Post-Acquisition Integration Simulation. MegaMouth Acquires Chewicalia. Global Market for MSTs. MegaMouth (USA). TanakaTooth (Japan). EuroSound Finland. Country of Tropicalia. Chewicalia. Country of Tropicalia. Electro Enamel. TropiDent. ParaSonic. Global Market for MSTs.

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Post-Acquisition Integration Simulation

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  1. Post-Acquisition Integration Simulation MegaMouth Acquires Chewicalia

  2. Global Market for MSTs MegaMouth (USA) TanakaTooth (Japan) EuroSound Finland Country of Tropicalia Chewicalia Country of Tropicalia Electro Enamel TropiDent ParaSonic

  3. Global Market for MSTs MegaMouth (USA) TanakaTooth (Japan) EuroSound Finland Country of Tropicalia Chewicalia Country of Paradiso Electro Enamel TropiDent ParaSonic

  4. Structure of Acquisition • Equity: 82% MegaMouth -- 18% Chewicalia • Technology: Use MegaMouths’s technology developed in USA • Manufacturing: Chewicalia will serve as one of MegaMouth’s global manufacturing center • Marketing/Distribution: MegaMouth will control all marketing in Tropicalia • Integration Strategy: Be more efficient, cut local manufacturing lines and employees, use USA-developed technology

  5. Acquisition Decision – Then… • Strategy – Deal • Due Diligence • Payment • Integration Strategy • Synergies, Assimilation, Combination, Rationalization, etc. • Integration Implementation/Execution • Value chain activities • Systems, processes, SOPs • Culture, organizational issues, politics, emotions, etc. • PEOPLE Strategy vs. Support

  6. Integration Strategy • Product • Use MegaMouths’s existing technology from USA Headquarters • Cut Chewicalia’s R&D • Manufacturing • Chewicalia becomes global manufacturing center for MegaMouth using the USA-developed technology • Cut one or two production lines • Marketing • MegaMouth controls all marketing/sales is Tropicalia • Up to 50% of Chewicalia’s salespersons’ pay is commission

  7. Integration Strategy • HRM • Cut 1,500 or 750 Chewicalia jobs • Pay is 50% wages + 50% (or more) piecework • Cut R&D staff 120 jobs or 60 jobs • R&D • Competing R&D teams • MegaMouth vs. Chewicalia • Winner gets 2 extra week holiday • Logistics • Use JIT system • Close Chewicalia’s warehouses • Cut local Tropicalia-based sourcing by 50%, source globally

  8. Simulation Teams Post-Acquisition Integration Leadership Team (PAILT) MegaMouth TMT Chewicalia TMT Chewicalia HR Chewicalia R&D Chewicalia Manufacturing Chewicalia Marketing Tropicalia Government Tropicalia Labor Union Tropicalia Customer 1 TropicaliaNews Media Play the role

  9. Simulation Process • Determine your team’s initial level of support or opposition for all elements of the integration strategy • Scale ranges from: • Strong Opposition (1) • Strong Support (5) • Iterative process – new information will change assessment • Find out what other teams think…Let other teams know what you think • Adjust your support as necessary • PAILT and MegaMouth’s TMT may adjust the strategy

  10. Team Support Level Data Form

  11. What MegaMouthWants vs. What MegaMouthMay Get

  12. What MegaMouthAdjusts vs. What MegaMouthWill Get

  13. Timeline 10:30 – Submit Initial Support Scores 10:30-11:30 – Influence Other Teams 11:35 – Submit Updated Support Scores (PAILT submits Final Integration Plan) 11:45-12:00 – Debrief/Discussion

  14. Debrief • What happened? • Surprised? • Conclusions

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