March'20
The IUP Journal of Business Strategy
Focus
Mergers and Acquisitions (M&As) involve transfer of ownership and are often seen as a strategy aimed at business consolidation. They are also seen as a source of creating competitive advantage and are a norm in the competitive landscape. The second paper, "The Impact of Mega Mergers on the Efficiency of Indian PSU Banks" by Shabnam Nishat and Tagar Lal Khan, presents a study that was conducted prior to the merger of some leading Indian public sector banks and seeks to analyze whether the proposed merger of the public sector banks led to efficiencies. In 2019, the Government of India announced the merger of 10 public sector banks into four bigger and stronger banks. With this, the number of public sector banks would come down from 27 to 12. Most Indian public sector banks are saddled with significant Non-Performing Assets (NPAs) that have reduced their lending ability and put a question mark on their sustainability and future growth plans. The authors, in the first phase, take NPAs as an undesirable output for banks and then revise the efficiency measures in a hypothetical post-merger scenario (considering a merger and a no merger scenario) to assess whether the merger resulted in a significant change in technical efficiency, pure technical efficiency and scale efficiency. For assessing this, they use Data Envelopment Analysis (DEA). The results of the study indicate that simply merging the banks does not lead to achieving economies of scale. The authors suggest that banks must frequently realign their product portfolios, dispose unfavorable assets and generate surplus for ensuring future investments.
The third paper, "Price Differentiation in Video Games: A Closer Look at the Free-to-Play Segment" by Karl-Heinz Moritz, Timo Sch?ber and Georg Stadtmann, looks at the interesting area of video games. The authors describes how Fortnite, the popular video game maker, has become an overnight success in the $108 bn market despite offering free games mostly to customers. Fortnite has three gaming modes, all of which have different monetization strategies. Players, in reality, need not pay any money to be a part of the game, but many choose to make in-game purchases to access dance moves and skins, which are outfits and accessories. The authors present how Fortnite successfully sells uniforms (skins) at four different prices to attract different segments in the market and highlight the implications of price differentiation for the profit maximization problem.
The Indian smartphone market is the second largest in the world and extremely competitive. Many companies operate in this market given the huge demand. The fourth paper, "Hypercompetition in the Indian Smartphone Industry: Strategies to Sustain and Scale Up" by Manoj Kumar Sharma and Sonali Sharma, analyzes the phenomenon of hyper competition in the smartphone market and presents how the largest brands in India- Xiaomi, Samsung, Vivo and Oppo-are thriving and ensuring their survival in the uncertain and competitive landscape by designing their own strategies and tactics.
Consulting Editor
| Article | Price (₹) | ||
| Building a Balanced Scorecard System for Forest Products Export Joint-Stock Company of Quang NAM |
100
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| The Impact of Mega Mergers on the Efficiency of Indian PSU Banks |
100
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| Price Differentiation in Video Games: A Closer Look at the Free-to-Play Segment |
100
|
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| Hypercompetition in the Indian Smartphone Industry: Strategies to Sustain and Scale Up |
100
|
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Building a Balanced Scorecard System for Forest Products Export Joint-Stock Company of Quang NAM
The purpose of the study is to build a Balanced Scorecard (BSC) to measure the operation, transmission, and implementation of the company's strategy effectively through developing a strategic map for the company based on the aspects of BSC, and identify the Key Performance Indicators (KPIs) for each strategic goal for each perspective of BSC. This study mainly focuses on the model, content, and method of building a BSC to manage strategy and measure performance. The authors used the qualitative research method: Contextual analysis at Forest Products Export Joint-Stock Company of Quang Nam (FOREXCO QN) to support in-depth interview questions to collect information to support the understanding of the company's production and business characteristics, and the management will then conduct a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis, identify appropriate strategies and strategic objectives and ultimately develop strategic maps. Then, from the steps mentioned above, the authors will conduct focus group interviews to find KPIs and indicators to measure. In practice, the authors have built a BSC based on previous studies, especially the research of Kaplan and Norton.
The Impact of Mega Mergers on the Efficiency of Indian PSU Banks
The present business environment deems Mergers and Acquisitions (M&As) as a very familiar and efficient strategy to grow and survive. In emerging economies like India, M&As undoubtedly help in sustaining economic growth. M&As help to get faster growth, to compete with rivals, to expand business abroad and also to increase market share. This paper investigates the efficiency of the Indian Public Sector Undertaking (PSU) banks in the light of upcoming mergers in the Indian banking sector. The paper computes bank efficiency by using non-parametric Data Envelopment Analysis (DEA) technique considering the original inputs-outputs data and also the data of hypothetical mergers, considering Non-Performing Assets (NPAs) as undesirable output in both the cases. After computing the efficiency of the Indian PSU banks for merger and non-merger situations, Wilcoxon matched pairs signed-rank test has been applied to examine any significant change in the efficiency levels of banks' accounting from mergers. The study reveals that only merging of banks might not be fruitful for improving the efficiency of the Indian PSU banks and might not be sufficient for overcoming the challenges and threats facing them. The managers of banks should put serious efforts for improving their efficiency through better cooperation, understanding, efficient utilization of common resources and by implementing better strategic decisions overall.
Price Differentiation in Video Games: A Closer Look at the Free-to-Play Segment
Companies which offer 'free-to-play' video games have to optimize the in-game-shop in order to generate revenues. Price differentiation is one possibility to optimize the profitability of the game. For example, Fortnite-the most successful video game in terms of revenues-offers uniforms (skins) at four different prices. This attracts different segments of the market. The authors use a microeconomic approach in order to highlight the implications of price differentiation for the profit maximization problem.
Hypercompetition in the Indian Smartphone Industry: Strategies to Sustain and Scale Up
The Indian smartphone industry is the world's second largest market for smartphones after China. It is a perfect example of an industry subject to the conditions of hypercompetition. Companies, existing and new, need to formulate and implement unique and innovative strategies to survive under such turbulent conditions. This paper aims at suggesting suitable strategies that can be employed by companies in the Indian smartphone industry to cope with hypercompetition and create a sustainable competitive advantage for themselves. Using multiple case studies analysis of the top four brands, i.e., Xiaomi, Samsung, Vivo, and Oppo, it has been suggested that 'a set of strategies' should be carefully formulated and properly implemented by the companies to ensure their survival and growth in the market.