Good Example Of Billabong Report
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Mergers and acquisitions are terms that are commonly used in industries. A merger exists when two companies combine or join to form a single company. On the other hand, an acquisition exists when one company purchases another whereby no new company is formed. International strategy refers to the plans guiding business transactions that take place between business entities in different countries. Alliances refer to the associations that exist between countries or organizations for mutual benefit (Hitt, Ireland & Hoskisson, 2012).
Billabong International Limited has had an experience in these. The Australian company recently has an agreement of being acquired by an apparel company from the US, VF Corp. and another one called Altamont Capital Partners for a bid of US$556 million. This shows that the company underwent an acquisition by the VF Corp and Altamont Capital Partners. The acquisition means that the assets both fixed and current will be taken over by the companies. It will also take own some shares of the company (Collins, 2014).
There are plans for the company to enter into a recapitalization agreement between it and Centerbridge Partners and Oaktree Capital Management. The agreement will ensure that the companies will have at least 34% of the retailer of turf ware. This deal will ensure that the company pays Altamont, GSO Capital among others (Collins, 2014).
Additionally, there are Billabong has entered into agreements with companies such as Perennial Investment Partners Ltd, TIAA-CREF, Templeton Global Advisors Ltd , Dimensional Fund Advisors L.P, and Templeton Investment Counsel L.L.C which have percentage ownership of 2.2%,, 2.2 %, 1.8%, 1.6% and 0.6% respectively. These agreements have led to Billabong forming mergers with the respective companies. The forming of the mergers was due to billabong’s struggling financial position hence the need for the company to merge with more stable companies. The mergers have proved to work since the overall turnover of the company has been rising over the years. Also, in 2012 Billabong merged with a private equity firm called Trilantic Capital Partners through Billabong’s watch unit, Nixon (Collins, 2014).
In terms of the international strategy, the company is expected to make a turnaround soon after it unveiled its strategy. This was at during the AGM of the company where the new CEO of the company said they were shifting the focus to the youth through three main pillars which are aspiration, authenticity, and heritage. This was in areas of marketing, supply chain, financial and organizational chain among others. It also announced its relation with other companies like VF Corp that are international. This was aimed at ensuring the company does not wind up due to recording losses (Gomes, Weber, Brown & Tarbia, 2011).
Specifically, the company’s international strategy hinges around its simplifying business with international business partners, ensuring that it globalizes and integrates the supply chain, leverages other key brands internationally, continuing to enlarge global e-commerce platform and globalizing the brand Billabong. The strategy has seen key advisors in terms of financial matters commend the company for the futuristic drive. Advisers of the company include the IAG ; Insurance Australia Group Limited (Gomes, Weber, Brown & Tarbia, 2011).
The company recently sealed an alliance with the Universal Music group. The companies announced a world partnership that will have music and action sports that will be through varied products and services that are innovative. The CEOs of both companies announced that they would cooperate especially in the music and surfing industries. The alliance is aimed at changing the youth and their behavior especially when it comes to entertainment and the worlds of action sports (Ulijn, Duysters & Meijer, 2010).
The strategic management of Billabong in future is hinged on the strategic plan that was unveiled during the AGM. The plan is simple in that the company plans to have a turnaround in its products, brand, Omni-channel, marketing, organizational and financial discipline and the supply chain. Also, it included the IT strategy. In terms of recommendations on the company’s strategy, it is prudent for it to uphold the IT strategy. Now that it also deals in IT related products, it should maximize in the implementation of the strategy to ensure that it has been marketed heavily in all media platforms (Pahl & Ritcher, 2009)..
No part should be left unattended to. Additionally, it needs to uphold its financial and organizational discipline further. This is through maintaining the right books of account, accounting for any flaws in the system and ensuring that employees have the best moral standards. The company should always have international partners so that they come in when the sales are stumbling and recapitalize. Also, it should ensure that the plan is workable before implementing it (Gomes, Weber, Brown & Tarbia, 2011)
Additionally, the company needs to revisit its goals and objectives to ensure that it not only focuses on America and Australia and ensures that it focuses on other large markets such as Latin America, Africa and some parts of Asia. This will help it bounce back into business in style. Billabong also needs to revisit its employment pattern and status. It needs to reduce some staff to avoid unnecessary costs. This saving on expenses will ensure the company regains strength. It also needs to incorporate all key players in business in its decision making for it to regain its lost strength (Gomes, Weber, Brown & Tarbia, 2011).
In conclusion, Billabong is a company that has a worldwide reputation worldwide. The possible mergers and acquisitions may make the company record profits and turn around. Currently, its productions have started rising again and should ensure it implements the strategy fully for it to remain relevant.
Collis, D. (2014). International Strategy: Context, Concepts and Implications. Hoboken: John Wiley & Sons.
Gomes, E., Weber,Y., Brown,C., & Tarbia,S.Y. (2011). Mergers, Acquisitions and Strategic Alliances: Understanding the Process. London: Palgrave Macmillan.
Ulijn,J.M., Duysters, G.,& Meijer, E. (2010). Strategic Alliances, Mergers and Acquisitions: The Influence of Culture on Successful Cooperation. Cheltenham : Edward Elgar Publishing.
Hitt., M., Ireland ,R. D., & Hoskisson, R. (2012). Strategic Management Cases: Competitiveness and Globalization. Boston: Cengage Learning.
Pahl, N., & Richter, A. (2009). International Strategic Alliances and Cross-Border Mergers & Acquisitions. Hamburg: BoD – Books on Demand.
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