Wipro's Inorganic Growth Strategy
Case Code: BSTR427
Case Length: 17 Pages
Pub Date: 2013
Teaching Note: Not Available
Countries: India; Asia
Themes: Growth Strategy, Mergers & Acquisitions, Post Merger Integration
Abstract Case Intro 1 Case Intro 2 Excerpts
In December 2012, Wipro Consumer Care and Lighting (WCCL), a Bangalore, India based FMCG company acquired LD Waxson, a Singapore-based FMCG company. This was its fourth global acquisition and the second largest deal among its acquisitions. Wipro, in 1975, started diversifying its operations into various sectors like software and IT services, infrastructure engineering, lighting, furniture, etc. Though it started these on its own, later it took the inorganic route to achieve growth. It went on an acquisition spree, the strategy which it called as 'String of Pearls'. It acquired many companies that fit in strategically with it in almost all its business segments but more in the IT division.
The consumer care division also saw a few acquisitions, the largest being the acquisition of Singapore-based Unza Holdings Berhad (Unza) in 2007 for about US$246 million. When Unza was acquired, WCCL was a smaller company than Unza. While industry analysts felt that through the acquisition, WCCL had enjoy advantages like the addition of products and global markets, they also wondered whether managing Unza would prove to be a daunting task for an Indian player inexperienced in international markets. They felt that WCCL could not handle such a huge distribution network and product portfolio and that there would be problems in integrating both groups. However, after successfully integrating Unza, WCCL went ahead for more global acquisitions like Yardley and LD Waxson. After these acquisitions, speculation was rife among the media and investors that the company was planning to hive off its consumer care business.
The case is structured to achieve the following teaching objectives:
- Wipro's inorganic growth strategy and international acquisitions by the consumer care division
- Synergies as well as cultural and operational differences that arise in international acquisitions
- Difficulties faced by the company in integrating the acquired entity with the parent company
- Wipro's corporate governance strategies for integration
- What should Wipro Consumer Care do - spin-off or stay integrated with the IT division?
Wipro's Acquisitions and Alliances
Unza - The Largest of Wipro's Acquisitions
Overcoming the Integration Problems
Reaping the Rewards
Other Acquisitions Follow
Growth strategy; Inorganic growth; Mergers & acquisitions; Post merger Integration; Corporate governance; Managing across borders and cultures; Diversification; Fast moving consumer goods; Wipro; Unza
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