Overview
Firm description 2
Main activities 2
Key figures and key persons 2
Key challenges in the past 2
Key challenges in the future 3
Key opportunities in the future 3
Internationalization 3
Topic 1: Information Theory 4
Acquired firm 4
Expected corporate-level benefits 4
Level of information asymmetries 4
Alleviating information asymmetries 4
Topic 2: Agency Theory 5
Foreign subsidiary 5
Agency relationship 6
Positive theory of Agency, Resolving the agency problem 6
International subsidiary problems 7
Topic 3: Organizational Learning 8
Major internationalization moves 8
Valid inferences from prior expansions 8
False inferences from prior expansions 9
Sources 10
Firm description
MAIN ACTIVITIES
Ahold is a Dutch international retailer …show more content…
As a result Ahold changed its strategy in carrying out acquisitions and focused more on building strong local brands. Ahold uses the technique of screening its suppliers and all potential future investments, so that that Ahold is able to avoid buying lemons. Ahold learned from its aggressive acquisition tactics that it was not possible to enter foreign markets through joint ventures with the only information being the price, buying profitable firms was in not doable in this case. One thing Ahold could have done is to buy 10% of the shares of Disco to begin with. By purchasing only 10% Ahold would have got access to the company’s financial information so it could get acquainted with the company and learn more about its positive and moreover its negative sides. By doing this the levels of information asymmetries would decrease. Another thing Ahold could have done is to hire a local attorney before the deal who would have more insight hence more information than Ahold about the Argentinan market. This would also lower the levels of information asymmetries. By applying these solutions Ahold would be prevented to buy lemons and overcome potential risks incurred by information …show more content…
To restore its financial health, regain its credibility and strengthen its business for the future. The plan involved to divest all operations which would not achieve a number one or two in the market and operations which could not meet defined profitability. As a result Ahold divested all its operations in South America and Asia retaining it profitable subsidiaries in Europe and the US. They did divest some non-profitable subsidiaries in the US, including Golden Galleon, Tops, and Bruno’s. Furthermore it strengthened accountability, controls and corporate governance and restored its financial situation, by regaining investment grade in
Firm description 2
Main activities 2
Key figures and key persons 2
Key challenges in the past 2
Key challenges in the future 3
Key opportunities in the future 3
Internationalization 3
Topic 1: Information Theory 4
Acquired firm 4
Expected corporate-level benefits 4
Level of information asymmetries 4
Alleviating information asymmetries 4
Topic 2: Agency Theory 5
Foreign subsidiary 5
Agency relationship 6
Positive theory of Agency, Resolving the agency problem 6
International subsidiary problems 7
Topic 3: Organizational Learning 8
Major internationalization moves 8
Valid inferences from prior expansions 8
False inferences from prior expansions 9
Sources 10
Firm description
MAIN ACTIVITIES
Ahold is a Dutch international retailer …show more content…
As a result Ahold changed its strategy in carrying out acquisitions and focused more on building strong local brands. Ahold uses the technique of screening its suppliers and all potential future investments, so that that Ahold is able to avoid buying lemons. Ahold learned from its aggressive acquisition tactics that it was not possible to enter foreign markets through joint ventures with the only information being the price, buying profitable firms was in not doable in this case. One thing Ahold could have done is to buy 10% of the shares of Disco to begin with. By purchasing only 10% Ahold would have got access to the company’s financial information so it could get acquainted with the company and learn more about its positive and moreover its negative sides. By doing this the levels of information asymmetries would decrease. Another thing Ahold could have done is to hire a local attorney before the deal who would have more insight hence more information than Ahold about the Argentinan market. This would also lower the levels of information asymmetries. By applying these solutions Ahold would be prevented to buy lemons and overcome potential risks incurred by information …show more content…
To restore its financial health, regain its credibility and strengthen its business for the future. The plan involved to divest all operations which would not achieve a number one or two in the market and operations which could not meet defined profitability. As a result Ahold divested all its operations in South America and Asia retaining it profitable subsidiaries in Europe and the US. They did divest some non-profitable subsidiaries in the US, including Golden Galleon, Tops, and Bruno’s. Furthermore it strengthened accountability, controls and corporate governance and restored its financial situation, by regaining investment grade in