Critique of Royal Dsm

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During the in class critique of the DSM case, our group introduced several viewpoints that were not included in the presentation of the case or mentioned only briefly by the presenting group. Overall, we agreed with the presentation team that the knowledge and ability to quickly disentangle the IT from one company and smoothly integrate it with another company would be a strategic advantage. This would be especially true for a company like DSM whose primary strategy was diversification and growth through selling a portion of its own company and acquiring other companies.

Although they did present DSM’s competencies of disentangling and integrating IT as an advantage, during the critique process our group proposed that the presentation team misunderstood how DSM fully used this advantage as leverage in the purchase of Roche Vitamins. The presenting group stated that, “Roche underestimated the value of ICT they had in place which allowed DSM to save money…” Our group expressed the idea that this was not what the case stated. In fact, van den Hanenburg was quoted in the case as saying, “they [Roche] had underestimated the cost of disentanglement and integration…” During the purchase negotiations, DSM’s experience gave it more accurate information about how expensive it would be to disentangle and integrate Roche’s ICT. DSM then used this information to leverage Roche into a lower selling price because of the after-sale costs that would be required.

Another viewpoint raised by our group was a question as to whether this type of strategic advantage was sustainable. Like many other elements of IT operations, the methods used by DSM could be copied by other firms and become standard practice. We would have liked for the presenting team to provide more information about whether the company is still using this knowledge and skill, and if so, how.

Different viewpoints and ideas were also raised by other members of the class during discussion, and we felt some of...
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