The paper "Analysis of Southcorp-Rosemount Merger" is a good example of a management case study. Merging is a process of two firms, usually of about the same size, agreeing to combine into a single company other than remaining separately operated and owned. At times, the newly formed company or the merger acquires assets and liabilities of the merging firms. The two firms share production, distribution and marketing costs. The merged firm is supposed to develop an operating environment that will incorporate the different operational models of the two firms.
This is important because the two firms had different business goals before merging which are maintained even after merging. Failure to developing an operational model that accommodates the needs of the two firms can see problems emerge in the merged firm as a result of different business operations between the two firms. The merging firms combine their resources and share costs in order to increase production. In this case, Southcorp wine company and Rosemount wine company merged to form Southcorp-Rosemount merger which turned out to be the biggest wine manufacturing company in Australia.
After merging, the firms combined their grape and the merger was able to produce large quantities of wine. As a result, the merger had to look for more export markets for their products and improve the quality and varieties of their wine in order to secure a place in the competitive market. The firms shared production, distribution and marketing costs so as to cut costs incurred in the production and marketing of their products. However, there was a problem in the operational model to be used by the merger because the two firms had diverse operational models before merging.
Southcorp company focused on grape production and winemaking while Rosemount company focused on wine production, distribution and marketing. Therefore the merger had to develop an operational strategy which accommodated the diverse operations of the two firms. Grape Expectation: A Case Study of the Southcorp-Rosemount Merger Introduction The case study shows how Australian Rosemount and Southcorp wine companies merged to become the biggest wine company in Australia. The merger achieved great success by adopting very different marketing and operational strategies. However, problems emerged from asset-related inaptness between the two companies and a difficult pricing environment in key markets for the merged firm.
The potential benefits of the merger include cost savings and capacity to harness capital resources in sales, marketing, and distribution. In order to achieve these benefits, the merged firm requires new approaches to organize the internal structure together with innovative and new supply relations within the firm and the wine industry value chains. Problem Affecting the Merged firm The benefits of a merger are expected to go beyond the scale. Price synergies are estimated to emerge in production, marketing, and distribution.
There is a difficulty in the operation of the merger because the two firms operating in very diverse modes. Southcorp focuses more on the production of grape and winemaking while Rosemount greatly concentrates on winemaking, distribution, and marketing. The scheme of joining two very diverse firms requires a change in internal management so that the business goals of both firms are achieved. The operating environment should change in order to incorporate the different operating models of the two firms. Prior to merging with Rosemount, Southcorp was an archetypical wine firm in Australia.
The firm produced both good and bad wine and its variety spanned from best of the bottled wine Penfolds Grange Hermitage to a few of the unpleasant bottles wine such as the Matthew Lang. On the other hand, Rosemount has always applied a high value, high-quality strategy in production and has developed a place as a manufacturer of wines of constant quality (Rice & Galvin, 2006).