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STRATERGY MEANING AND DEFINITION

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A strategy is a plan of action designed to achieve a specific goal. Strategy is all about gaining (or being prepared to gain) a position of advantage over adversaries or best exploiting emerging possibilities. As there is always an element of uncertainty about future, strategy is more about a set of options ("strategic choices") than a fixed plan. It derives from the Greek word strategia.

DEFINITION:
“A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.

STRATERGIC MANAGEMENT:
Strategic management is a field that deals with the major intended and emergent initiatives taken by general managers on behalf of owners, involving utilization of resources, to enhance the performance of firms in their external environments. It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Recent studies and leading management theorists have advocated that strategy needs to start with stakeholders expectations and use a modified balanced scorecard which includes all stakeholders.

MERGERS AND ACQUISITIONS:
Merger and acquisition are the corporate strategies that deal with buying, selling or combining different companies with a goal to achieve rapid growth. However, the decisions on mergers and acquisitions are taken after considering a few facts like the current business status of the companies, the present market scenario, and the threats and opportunities etc. In fact, the success of mergers and acquisitions largely depend upon the merger and acquisition strategies adopted by the organizations.

Merger and acquisition strategies are the roadmap for the corporate development efforts of an organization. The strategies on merger and acquisition are devised to transform the strategic business plan of the organization to a list of target acquisition prospects. The merger and acquisition strategies offer a framework, which evaluates acquisition candidates and helps the organization to identify the suitable ones. Many big companies continuously look out for potential companies, preferably smaller ones, for mergers and acquisitions. Some companies may have their core cells, which concentrate on mergers and acquisitions. Merger and acquisition strategies are devised in accordance with the policy of the organization. Some may prefer to diversify or to expand in a specific field of business, while some others may wish to strengthen their research facilities etc.

MERGER AND ACQUISITION STRATERGIES:
The merger and acquisition strategies may differ from company to company and also depend a lot on the policy of the respective organization. However, merger and acquisition strategies have got some distinct process, based on which, the strategies are devised.

DETERMINE BUSSINESS PLAN DRIVERS:
Merger and acquisition strategies are deduced from the strategic business plan of the organization. So, in merger and acquisition strategies, you firstly need to find out the way to accelerate your strategic business plan through the M&A. You need to transform the strategic business plan of your organization into a set of drivers, which your merger and acquisition strategies would address. While chalking out strategies, you need to consider the points like the markets of your intended business, the market share that you are eyeing for in each market, the products and technologies that you would require, the geographic locations where you would operate your

business in, the skills and resources that you would require, the financial targets, and the risk amount etc.

DETERMINE FINANCING CONSTRAINS:
Now, you need to find out if there are any financial constraints for supporting the acquisition. Funds for acquisitions may come through various ways like cash, debt, public and private equities, PIPEs, minority investments, earn outs etc. You need to consider a few facts like the availability of untapped credit facilities, surplus cash, or untapped equity, the amount of new equity and new debt that your organization can raise etc. You also need to calculate the amount of returns that you must achieve.

DEVELOP ACQUISITION CANDIDATE LIST:
Now you have to identify the specific companies (private and public) that you are eyeing for acquisition. You can identify those by market research, public stock research, referrals from board members, investment bankers, investors and attorneys, and even recommendations from your employees. You also need to develop summary profile for every company.

BUILD PRELIMINARY VALUATION MODELS:
This stage is to calculate the initial estimated acquisition cost, the estimated returns etc. Many organizations have their own formats for presenting preliminary valuation.

RATE/RANK ACQUISITION CANDIDATEs:
Rate or rank the acquisition candidates according to their impact on business and feasibility of closing the deal. This process will help you in understanding the relative impacts of the acquisitions.

Acquisition’s by TCS: TCS is looking at growth from two ways

first through organic means and second through theinorganic way. The inorganic way of growth is through acquisitions of those companies that makebusiness sense to TCS. The companies should add great value to TCS. Like for instance TCSacquisition of CMC is helping it taking a sharper look at the domestic IT business. Both thecompanies have synergies in the government sector, since both the companies are well known fordoing work for the government.TCS as part of its strategy to look at growth options has set up an internal team which will focus onlyon acquisition strategies .Below are some of the acquisitions of TCS in the recent past:

Nov 2008: TCS Acquisition of Citigroup Services.
TCS gains a range of new capabilities, withend-to-end banking BPO service offerings, and an opportunity to provide integrated IT andBPO services to the banking market, as well as the significant contracted revenuecommitment. Over 12,000 staff has transferred with the deal. From the Citigroup side, theyget a cash payment, and an external partner committed to deliver (and probably to improve)the services they have monetized their investment in setting up CGS (Citigroup Services).They no longer have direct responsibility for managing an offshore delivery centre in amarket becoming increasingly competitive, and they have significantly reduced their overallheadcount.

Feb 2006: Tata InfoTech (TIL) Limited was merged into TCS Limited. TIL was a softwareservices company like TCS with operations in the UK, U.S, and Australia among others. Themerger gave TCS a broader customer base and deeper penetration into key geographies. Theacquisition was touted as providing TCS more ability to provide full-service to customers inaffected markets.

March 2006: TCS, through its subsidiary,Diligenta, acquired a basis in part of UK’s PearlGroup. Pearl is the 2nd largest player in the UK’s life insurance and pension BPO industry,giving TCS a new stake in BPO work for the UK market.Right after Pearl, TCS picked up Comicron in Latin America to offer banking solutions in both IT and BPO services in that market, and now Spanish language capability. Experience gainedhere will again allow TCS to expand further into new markets with BPO offerings, especiallyin the rather large and under-addressed Spanish-speaking world. Oct. 31, 2006: Similar to the financial stakes made above, TCS again expanded its bankingproducts and consolidated its European operations after acquiring a 75% equity stake in itsSwitzerland-based partner, TKS-Teknosoft. TKS was the marketing agent for TCS in Europe. Here it is to be seen that TCS has acquired most of the companies following proper stratergies. The company made a thorough research in acquisition’s of various companies. This acquisitions gave TCS a bigger market to takeover and a huge possibilities in various foreign markets for further bussiness.