The Strategic Alliance of Bang & Olufsen and Philips N.V.
The case takes place shortly after B&O concluded a strategic alliance with Philip NV in which Philips injected some equity capital into B&O. Philips paid a 35% premium over market price for B&O because it expected to achieve some synergies for both parties. At the time of the case, B&O is deciding what steps to take to gain the anticipated synergies.
The B&O case is a good illustration of the interplay between finance and strategy. It can be used in both the international finance and strategy courses. The "case questions" provide a good way to structure the case discussion. In order to focus class discussion, I start by putting Michael Porter's "value-added chain" on the blackboard. The class then discusses the weaknesses and strengths of B&O in the context of the value-added chain.
