Purchase. Management Decision, 50(8), 1396-1411. For Merger Arbitrage at Tannenberg Capital B, based on the SWOT Analysis, Porter Five Forces Analysis, PESTEL Analysis, VRIO analysis, Value Chain Analysis, BCG Matrix analysis, Ansoff Matrix analysis, and the Marketing Mix analysis, the recommendations and action plan are as follows: Baron, E. (2015). Pickton, D. W., & Wright, S. (1998). The Value chain analysis of Merger Arbitrage at Tannenberg Capital B helps in identifying the activities of an organization, and how these add value in terms of cost reduction and differentiation. Management, 3rd edition. Business Strategy Review, 14(2), 8-10. Cash Cows are those strategic business units with high market share and low market growth rate. These are the threats that the industry faces due to new entrants. The Merger Arbitrage at Tannenberg Capital B case study is a Harvard Business Review case study, which presents a simulated practical experience to the reader allowing them to learn about real life problems in the business world. Merger arbitrage is an investment strategy that seeks to profit from the uncertainty that exists during the period between when an acquisition is announced and when it is formally completed. A good implementation framework shows the proposed plan and how the organisations' resources would be used to achieve the objectives. Harvard Business Review cases involve a central problem that is being faced by the organization and these problems affect a number of stakeholders. Actionable and practical solutions can then be developed by keeping these factors into perspective. Begin slowly - underline the details and sketch out the business case study description map. In the simplest case, the method of payment is cash, meaning that the acquirer ... long-short merger arbitrage returns as follows by distinguishing between stock deals andcashdeals. Hussain, S., Khattak, J., Rizwan, A., & Latif, M. A. Each of these resources are assessed in terms of the value it brings to the organization. Risk Arbitrage is essentially just arbitrage with some element of risk. PESTLE Analysis. The matrix involves placing the strategic business units of a business in one of four categories; question marks, stars, dogs and cash cows. Hedge Fund Strategies - 3 - Merger Arbitrage 1 Simple Case Of Merger Arbitrage When There Is An All Cash Acquisition; 5. What is Merger Arbitrage? Strategic Management Theory: An Integrated Approach, Ninth Ed. Retrieved from http://www.free-management-ebooks.com/dldebk-pdf/fme-pestle-analysis.pdf. How to Destroy America in Three Easy Steps, Disloyal: A Memoir: The True Story of the Former Personal Attorney to President Donald J. Trump, 100% found this document useful, Mark this document as useful, 0% found this document not useful, Mark this document as not useful, Save Merger Arbitrage Case Study For Later. Officer (2007) found the opposite result. Kim, W. C., & Mauborgne, R. (2004). on WhatsApp for any queries. 7 Effective Steps to Solve Case Study. Stars are those strategic business units with high market share and high market growth rate. We will focus on merger arbitrage, as it pertains to this case study. One does not need to remain restricted to using the traditional SWOT analysis, but the advanced TOWS matrix or weighted average SWOT analysis can also be used. If it’s none, then it can be regarded as a competitive disadvantage. Dogs are those strategic business units with low market share and low growth rate. Porter, M.E. It can also be done by looking at anecdotal instances of managers or employees that are usually included in an HBR case study description to give the reader a real feel of the situation. Chat with us Strategies can be devised to improve the availability of the company’s products. Merger Arbitrage at Tannenberg Capital B should enhance the value creating activities within its value chain. At times in a case analysis, the problem may be clearly evident in the reading of the HBR case. Each resource is assessed whether it could be imitated by competition easily or not. Risk arbitrage, also known as merger arbitrage, is an investment strategy that speculates on the successful completion of mergers and acquisitions.An investor that employs this strategy is known as an arbitrageur. The organization can enter new markets with its existing products. Diary of a Wimpy Kid: Diary of a Wimpy Kid, Book 1, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, MONEY Master the Game: 7 Simple Steps to Financial Freedom, The Creation Frequency: Tune In to the Power of the Universe to Manifest the Life of Your Dreams. K, & Martin, D. (1998). A blue ocean strategy is a strategy that involves firms seeking uncontested market spaces, which makes the competition of the company irrelevant. Home; Courses; ... Set your study reminders. The next step is of understanding the company; its people, their priorities and the overall culture. Retrieved from https://www.hbs.edu/mba/blog/post/8-tips-to-help-you-prepare-for-the-case-method. Academic writing has no room for errors and mistakes. : A review of academic research from the last decade. Essentially, an arbitrageur is seeking to profit from the movements of the acquirer’s and or target’s stock price from the merger. For example, if one suggests the organisation to focus on differentiation for competitive advantage as a corporate level strategy, then it can't be recommended for the Merger Arbitrage at Tannenberg Capital B Case Study Solution that the business unit should focus on costs. This shows how through a step-by-step procedure as to how the central issue can be resolved. This strategy makes money for investors if the merger goes through. This is known as a diversification strategy. Exploring SWOT analysis – where are we now? These solutions will also be the Merger Arbitrage at Tannenberg Capital B case answers. These are either to further develop the product, penetrate the market, develop the market, diversification, investing or divesting. Ansoff Matrix is an important strategic tool to come up with future strategies for Merger Arbitrage at Tannenberg Capital B in the case solution. Author links open overlay panel Liang Wang Xianyan Xiong Tingjia Xu. How They Teach the Case Method At Harvard Business School. Three main types of risk arbitrage are merger and acquisition arbitrage (also known as just merger arbitrage), liquidation arbitrage, and pairs trading. Merger arbitrage is an aggressive investment strategy that is used by investment bankers. Retrieved from https://poetsandquants.com/2015/09/29/how-they-teach-the-case-method-at-harvard-business-school/. Question Marks are those strategic business units with high market share and low market growth rate. The case solution first identifies the central issue to the Merger Arbitrage at Tannenberg Capital B case study, and the relevant stakeholders affected by this issue. The first step of the solution is to come up with a corporate level strategy for the organisation. Once this listing has been done, a clearer picture can be developed in regards to how strategies will be formed to address the main problem. Identify the market growth of each strategic business unit. The strategies devised and included in the Merger Arbitrage at Tannenberg Capital B case memo should have a blue ocean strategy. At other times, finding the issue is the job of the person analysing the case. The organization can enter into new markets with new products. Subscribe now to get your discount coupon *Only correct email will be accepted, (Approximately A fuzzy quantitative VRIO-based framework for evaluating organizational activities. This could include suggestions, changes or recommendations to the company's vision, mission and its strategic objectives. It involves coming up with new and unique products or ideas through innovation. Before we get too into the specifics of how merger arbitrage strategies work, let’s recap the basic concept of arbitrage. Step 2 - Reading the Note on Risk Arbitrage HBR Case Study . It’s slated to close in 2H16. Farallon Capital Management: Risk Arbitrage (B) Case Solution, This case is about FINANCIAL MARKETS, MERGERS & ACQUISITIONS, RISK MANAGEMENT PUBLICATION DATE: October 06, 1998 Farallon Capital Management: Risk Arb The SWOT analysis is a strategic management tool that lists down in the form of a matrix, an organisation's internal strengths and weaknesses, and external opportunities and threats. arbitrage success have received little attention in previous studies. Place these strategic business units in one of four categories. Journal of Strategy and Management, 3(3), 215-251. Therefore, the implementation framework ensures that the solution to the Merger Arbitrage at Tannenberg Capital B Harvard case is complete and properly answered. This can be done by using company history. For a more enjoyable learning experience, we recommend that you study the mobile-friendly republished version of this course. Factors within each of these 6 should be listed down, and analysis should be made as to how these affect the organisation under question. Another major strength of … Blue ocean strategy. Table 2: Yearly Merger Arbitrage Returns for Selected Hedge Funds Based on previous research studies, Jetley and Ji (2010) and Ferguson, Wei and Chichenea (2011), found cash mergers experienced smaller arbitrage spreads than stock deals. This paper presents the solved Merger Arbitrage at Tannenberg Capital B case analysis and case solution. Another helpful tool in finding the case solutions is of Porter's Five Forces analysis. Analyse the company’s price points and devise strategies that could be based on competition, value or cost. Analysis of the industry is important as businesses do not work in isolation in real life, but are affected by the business environment of the industry that they operate in. PESTLE Technique–a Tool to Identify External Risks in Construction Projects. Merger arbitrage, a strategy that involves the simultaneous purchase and sale of stocks in two companies that are merging, is one of these strategies. The placement in these categories depends on the relative market share of the organization and the market growth of these strategic business units. Merger arbitrage is the best example of this category where the hedge fund manager bets on a merger to happen by buying the stock of the target company while simultaneously shorting the acquirer. These studies found U.S. annual merger arbitrage returns respectively in the scale of 4 % to 11% above the market index when uti-lizing linear regression models such as CAPM and Fama-French. It is important to have more than one solution to the case study. To do so, it will need to use the marketing mix, which serves as a tool in helping bring out responses from the market. This is also a strategic tool that is used to analyse the competitive environment of the industry in which Merger Arbitrage at Tannenberg Capital B operates in. Free Management E-Books. In some HBR case studies, one may be required to analyse an issue at a department. This issue may be analysed for a manager or employee as well. One is also required to provide how these recommendations would be implemented. In these cases, recommendations need to be made for these people. In many announced mergers, a discount exists between the target company’s stock price and the funds or consideration proposed in the merger. The objective of the case should be focused on. This also looks at the external business environment of the organisation helps in finding case study Analysis to real-life business issues as in HBR cases. A simple example will illustrate this: On June 13, 2016, Microsoft announced its acquisition of LinkedIn, offering $196 for each LinkedIn share. The value chain and competitive advantage. If a resource is high on Value, Rareness, and Imitability, then it brings an unused competitive advantage. If a resource is high on all of these 4, then it brings long-term competitive advantage. These can usually be developed using the company history is provided in the case. Gupta, A. It can include recommendations on how the organisation can work towards achieving these strategic objectives. Strategies will be devised which makes use of a few or all of these elements. The second step of the solution is to come up with a business level strategy. Boston: Irwin McGrawHill. Show more. Bringing SWOT into Focus. Competitive advantage: creating and sustaining superior performance (Vol. Hanson, Samuel G. "Merger Arbitrage at Tannenberg Capital." Most recent surveys suggest that around 76 % students try professional academic writing services at least once in their lifetime! We will focus on merger arbitrage, as it pertains to this case study. If a resource is only valuable, then it’s a competitive parity. We are here to help. The 4 elements of the marketing mix are Product, Price, Place and Promotions. It shows that one has been clarified with the HBR fundamentals on the topic. Thus, for mergers in which the target’s shareholders receive cash, merger arbitrage involves buying the stock of the target after the merger has been announced. In fact, the combined assets under management of M&A hedge funds has increased 5x over the last decade (to $72bn in 2019), while the combined value of all the deals done in 2019 in North America reaches $2 trillion dollars. It also lays down the changes needed to be made as well as the assumptions in the process. This is an analysis carried out to know about the internal strengths and capabilities of Merger Arbitrage at Tannenberg Capital B. Share. Hence, they should be taken into consideration when coming up with the Merger Arbitrage at Tannenberg Capital B case solution. 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