Merger & Acquisition-Euro Sports Global Limited and Auto Inc. private limited

Running Head: International Business
International Business
Merger & Acquisition-Euro Sports Global Limited and Auto Inc. private limited

International Business P a g e | 1
Table Of Contents
Brief Background............................................................................................................................2
Evaluation of Strategic Undertaking...............................................................................................3
Suitability.......................................................................................................................................3
PESTLE Analysis..................................................................................................................................3
Porter 5 Forces..................................................................................................................................4
SWOT Analysis...................................................................................................................................6
TOWS Matrix.....................................................................................................................................6
Feasibility.......................................................................................................................................8
Acceptability................................................................................................................................10
Stakeholders....................................................................................................................................10
Stakeholder Mapping......................................................................................................................12
Rationale & Motivation................................................................................................................12
Motives for M&A –Eurosports Global & Auto Inc............................................................................13
Ansoff Matrix...................................................................................................................................14
Potential Organizational Problems...............................................................................................14
Recommendations........................................................................................................................15
Conclusion....................................................................................................................................17
References...................................................................................................................................18

International Business P a g e | 2
Brief Background
This report examines the merger of two companies in Singapore – Euro Sports Global
Limited and Auto Inc. Private limited in 2014. Euro Sports Global limited (listed on
SGX), is a luxury automobiles distributor who bought over 60 per cent stake in Auto Inc.
Sports, Auto Inc. lifestyle and Birel Singapore. This 1.5million Singapore dollar was paid
for the stake of Auto Inc. Sports, an automobile broker specialising in sports cars and
luxury cars, while Auto Inc Lifestyle offers a range of car care services. Birel Singapore
sells go-karts and provides maintenance and storage services for go-karts. The company
was renamed to Auto Inc Euro Sports Private Limited. AutoInc EuroSports is a broker
and detailing studio specializing in high performance, luxury and classic automobiles.
The vision of the company is pivotal in its growth strategy; the vision of the company is
to revolutionize the supercar industry by creating and delivering superior cars with
added differentiation and advanced features.
The merger presented an opportunity to sell more cars, not just new luxury cars but
also pre-owned luxury ones along with the introduction of a differentiated or unique
product, Zymol, under the car care services to a similar customer base and to tap into a
new base of customers. Products and markets are well known and recognised hence
this provided the best scope and strategy for leveraging on existing skills and assets and
new ones which complement the existing ones.
The purpose of the assignment here is to evaluate the strategic undertaking of the
company by using various strategic frameworks like PESTLE, Porter 5 forces, SWOT and
TOWS. The evaluation has to be done on the basis of four parameters namely suitability,
feasibility, acceptability, rationale and motivation. The report will further delve into

International Business P a g e | 3
identifying the organizational problems due to the merger and recommendation to
move the business towards business sustainability.
Evaluation of Strategic Undertaking
The underlying purpose of conducting this exercise is to examine the environment of
AutoInc and conduct an internal and external environmental analysis. A number of
micro and macro environmental models will be used for this purpose which is based on
the four pillars of:
Suitability
Feasibility
Acceptability
Rationale and Motivation
Suitability
PESTLE Analysis
PESTLE analysis is a fundamental strategic framework which is used to assess the
external environment of the industry in accordance with political, economic, socio-
cultural, technological, legal and environmental factors (Marttunen, Lienert & Belton,
2017).
PESTLE Facts Implication Outcome
 Political  The political
stability in
most part of
the world
and
emergence
of Singapore
as a
business
friendly
country is a
win-win for
 Stable
outlook
leads to no
or less
complication
 Peaceful
business
and less
governmen
tal
regulation.

International Business P a g e | 4
the
company
and the
industry(Ca
rson, 2017)
 Economical  The
economic
conditions
are far
better since
2014.
 Opportunity
for growth
and more
merger and
acquisition
 Discussion
on future
takeovers.
 Socio-cultural  People are
more
focussed on
the
differentiate
d products
which give a
boast to
their
lifestyle and
provides
satisfaction
 Plethora of
people
getting
involved in
luxury
vehicles to
boast their
social status
 Growing
interest on
the luxury
cars
 Technological  The broking
firm
believes in
high
technologica
l
enhanceme
nt in its
super cars
to better
suit the
present and
future need
of the
customers
 High
technology
laced cars,
catering to
the niche
audience
 More and
more
technologic
al
innovations
 Legal  Compliance
with the
emission
laws,
trading,
import and
export laws
 Ensuring
legal
compliances
ensure a
smooth run
for the
company in
the territory
 Zero
tolerance
policy
 Environmental  Revised
taxation on
luxury cars
 Increasing
taxes due to
carbon
 More
environme
ntal

International Business P a g e | 5
emission and
changes in
the prices of
the cars in
the segment
friendly
supercars.
Porter 5 Forces
Porter 5 force is another strategic model which helps in identifying the market
attractiveness of the industry in terms of profitability. Michael Porter in the year 1979
came with this model, which is of much use in every industry in the present day
(Nguyen, 2017).
Porter Forces Fact Implications Outcome
 Competitive
Rivalry
 Many rival
companies
offering
similar
services
(pre-owned
car business)
 But Autoinc
have value
added
products,
unique
models and
car care
services
(apart from
pre-owned
luxury cars )
which
complements
sustainable
competitive
advantage
 Highly
competitive
market
 advertising
expense
 High
Competitio
n (Strong
force)
 Bargaining
Power of
suppliers
 Pre-owned
cars-
Strength of
distribution
channel and
Switching
costs
 Car care
services –
 Trade-ins
from within
company and
costs of
trade-ins
managed
within.
 Low Power.