new insights into business teachers book (835558), страница 19
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The more remote the destination the morecomplicated and expensive it gets.Interviewer:In other words you identified the market?Spokesman:Yes absolutely. We knew more or less what therequirements of these companies were, the dimensionsand weights of what they needed to transport, andwere able to calculate the approximate size of themarket.Interviewer:So what was the concept behind the Cargolifter? Whatoriginal solutions were you proposing?Spokesman:Our idea was to use an airship to do the job of liftingheavy units and transporting them over long distances.Interviewer:What was the first step in getting the project running?Spokesman:Well the first thing we had to find out was if the ideawould actually work! So we put together a team ofengineers from different fields like transport, scienceand construction engineering and we asked them to doa feasibility study, to look at all the problems thatwotild be involved both in designing the airship itselfbut also in building it.
When that was done then weknew that we had a project that could really work.Interviewer:So where did you go from there?Spokesman:Well the next stage was to set up the company, find themoney we needed and start planning the developmentof the whole project. With a big project like this youneed a lot of money for research and for investment infacilities.Interviewer:How did you put together the financing of Cargolifter?Spokesman:We decided to raise venture capital and find investorswho would be willing to take the risk. In fact initially weinvited private investors, who now make up more than60% of our shareholders.
Then we sought the supportof the big firms from the transport and constructionand engineering sectors like ABB and Siemens and theyjoined the project as shareholders. Finally, we contactedsmaller companies in cargo transport to see if theywould be interested in joining us.Interviewer:So where is the project at today?Spokesman:Well we're in the process of building our productionunit on an airfield in Brandenburg.
And we're still oncourse to have our first ship, the Cargolifter CL 160flying in a year from now. Then we plan to developbigger versions in the future.Writing1 You may want to link the writing activity by statingthat we examined earlier how larger companies goabout setting up as a business.
Students now have anjopportunity to write a plan for an imaginary businessof their own. This section provides them with achecklist of the types of information that businessplans normally include.KEY:a 8b 1c 7d 4e 6f 2g 5h 3It may also be helpful at this stage to refer back to thelist of suggested questions in the Lead-in 2 activity.2 Although this is presented as a writing activity, it isquite possible to extend it for further speaking practiceby having each group of students give an oral summaryof their ideas for a new business. This can be done oncethe writing assignment has been completed.Alternatively, you may wish to organise a role-playwith groups working in pairs: Group A presents itsproject and Group В represents the bank.
Each groupthen switches roles.Another possibility is to form a panel with onerepresentative from each group. The panel thenassesses the different business proposals presented to itby each of the original groups and chooses any itwould support.You could finish the activity with a general discussionof the projects and the assessments.49u n i t 12Corporate Alliances and AcquisitionsKey vocabularyLead-inThis section provides simple definitions of the differenttypes of corporate deals or contracts made in thebusiness world today. Before students read throughthese explanations, you may want to introduce the topicby asking questions which lead students to produce thevocabulary themselves. Alternatively, you may wish toask students to close their books and fill the gaps in thephotocopiable exercise on page 71 after listening to thecassette version. The following is a list of possiblequestions together with possible answers:1 What options are open to businesses when they arecompeting with each other in the same market, if theywant to avoid a price war? (Answer: Co-operate onpricing policies./Form a merger.)2 What is one of the most expensive areas ofinvestment (after salaries) in, for example, theautomobile or the pharmaceutical industries? (Answer:Research & Development)3 Can you suggest a way to reduce the high costs ofResearch & Development? (Answer: Form a merger withanother company in the same line of business and shareR&D costs, or: Set up a joint venture project to do theR&D for the two companies.)4 What should a big successful company do if a smallerone produces cheaper and/or better quality products?(Answer: Buy them out, in other words make anacquisition.)5 What advantages can be gained by co-operatingwith another firm when purchasing raw materials orcomponents? (Answer: Bulk buying means economiesof scale.)6 (This question should generate the answer toquestion 7) How have businessmen in Western Europereacted to the opening up of the East European markets?(Answer: They have been buying up businessesthere/setting up joint ventures.)7 Can you think of any recent corporate alliances?(Answer: students will probably mention the automobilealliances.)8 Have you ever read about a failed merger orcorporate alliance, and why did it fail? (This question isoptional since it will depend on the type of student.)These questions will encourage students to think aboutthe present business environment and should lead theminto discussion about co-operation between businessesin general and specifically about cost sharing in areassuch as R&D and purchasing.
Students should also beencouraged to talk about why some business deals donot go through.1 This exercise gives students an opportunity to checkif they have understood fully the differences betweenmergers, joint ventures and acquisitions. Ask the pairsof students to read the text and underline the wordswhich told them the answers.50KEY:1 a are discussing a deal that would combine ...2 a This business project will be owned by EIAZ andGM ...3 c call off talks on the sale of newstand chain Ruch ...4 b planning to work together ...form one bigger andstronger bank ...5 c had agreed a deal to buv ...2 The purpose of this short pre-listening extract is toget students thinking and talking about why mergersfail (the theme of the main reading text in this Unit).As an introduction, ask students if they know anythingabout the merger of Volvo and Renault.KEY:IF2 T3 T4 FTAPESCRIPT: &Journalist: «Ms Galfard, the last tim e;we spoke, you explained tome in detaihwhat was gojng to be involved in theRenault-Volvo merger, which at that time had alreadybeen announced and looked very much like it wasgoing ahead.
Could you speak to me today about whythat merger failed?Ms Galfard:As a matter of fact, it is a little bit complicated to giveyou one short answer but I'll try to be as brief aspossible. The reasons are varied and I think personallythat nobody knows the exact reason for the failure.mrsti)\there are typically Swedish reasons. Manyshareholders, and in particular small shareholders, wereworried about what would happen to this Swedishcompany which they considered to be more or less anational symbol, and they were afraid that the Frenchcompany would take over, so they were not in favour ofthe alliance.Then, of course, you had complications with some ofthe managers, who believed that it wasn't going to beas good for business as they had originally hoped, andthey made an official statement of their fears andadvised that the merger should not go further. So,there was a board meeting at the beginning ofDecember 1993, and during this board meeting it wasdecided not to go ahead with the merger.
Then theUnit 12 Corporate Alliances and Acquisitions ■CEO, Mr Gyllenhammer, walked out of that meetingand later resigned. So, Volvo developed a new strategywith a new management team in April of the followingyear.3 In pairs, students discuss reasons why mergers fail.They may come up with suggestions such as:difficulties to agree on costs/prices, refusal of onecompany to reduce staff, lack of trust in managementpersonalities. The whole class can then contributereasons which can be listed on the board. To preparethem for reading the text, it might be useful at thisstage to ask the class questions such as: When a mergertakes place between two companies how do theydecide who will be the CEO? Do both CEOs run thenew structure together? How easy do you think itwould be for CEOs to share power? What kinds ofpeople make good CEOs? etc.Reading1 The text describes the contribution managers' egoscan make to failed mergers.
There are few vocabularyissues, but students may have problems with thefollowing (others will be dealt with in the exercises forthis section):Vocabulary: power-hungry (line 38) scenarios (100)Idiomatic expressions: jungle (title) a textbook example(lines 9-10) beasts of the jungle (line 24) boardroombust-up (line 42) tie the knot (line 65) added spice to(lines 77-78)Refer students to the list of reasons why mergers fail.Ask them to now read the text once to see if itmentions any of the suggestions on their list.23452 KEY: (suggested12345answers only)This alliance would have brought considerable financialadvantages to both companies and would have madethem the leader in their sector.
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