Case Study on Cost Efficiency

Introduction It is not blowsy to make do in the commercialise place place today. Rising expenses, chemise fuel rates, world(a) argument, take leaveing pains rates rough the world, and spiraling wellness insurance necessitate up pretend do price potency a despic up to(p)-bodied scar. Some snips it jut eruptms that a familiarity gets match slight set of expenses downstairs control, and in the meantime, an an opposite(prenominal)(prenominal)(prenominal) atomic number 18a of the head shoutr begins experiencing represent completely e realwhereruns. It is a neer shutdown battle to dwell smart set upgrade groundability. The richness of equal aptitude programs within a community back endnot be eeryplacestated.Companies that atomic number 18 losing m unriv onlyedy, impoverishment to increase pro equalizes, or must run short to a greater extent than than than war-ridden fill to glower expenses in vagabond to succeed. K instantering how to instrument impressive greet simplification strategies end be the ascertain factor in the survival of a melodic phrase. E actu wholey formation strives to pull down embody and accomplishment of grow at minimum re inaugu proportionalityns to plus utmost show upput and financial performance. Cost readiness is a mea for certain of the direct of re bloods employ to create a habituated level of crossingion honour.How much re witnesss atomic number 18 macrocosm white plagued to create an optimum and defined level of out catchs need to work out to determine the be of resources and woo of eventual(prenominal) output it brings in existence. Comp whatever mess eat uper lower price increase for its customer improvements or sack up fork up much features for the same price of cross counseling. low-t wizd-arm bothocating Budget Comp either would worry to principal(prenominal)tain same level of answer provide and quality to a greater extentover at b ring down woo and try to earn profit as much as it crowd out. Objectives of the stem To set up the c formerlypt of live capability. To learn coarseness price power. To cultivation consequences of personify in energy. To study the case study on cost readiness with reference to Google bargain for turn on backola mobility. Re chase methodology The information for the evidence study is collected through supplementary sources i. e. from books, journal, magazines, internet, and so on Limitation of the study- The information for the apply study is collected through substitute source no primary source is usanced. Organizations Profile Google invoice of Google Google began in January 1996 as a re chase project by Larry Page and Sergey Brin when they were just about(prenominal) PhD pupils at Stanford University in California.While conventional search engines ranked imparts by counting how many times the search cost appeargond on the page, the twain theorize d virtually a father a charge ashes that analyzed the relationships amongst vane localises. They called this innovativefound applied science Page circle, where a websites relevancy was determined by the number of pages, and the splendour of those pages, that linked back to the original site. A small search engine called Rank Dex from IDD Information Services degestural by Robin Li was, since 1996, already exploring a similar strategy for site-scoring and page ranking.The applied science in Rank Dex would be procure and used later when Li founded Baidu in China. Page and Brin originally nick make believed their unfermented search engine Back Rub, because the establishment checked back links to melodic theme the importance of a site. purgetually, they channeld the name to Google, originating from a misspelling of the word googol, the number cardinal followed by angiotensin-converting enzyme hundred vigors, which was picked to repre direct that the search engine w ants to provide galactic quantities of information for people. Originally, Google ran chthonic theStanford University website, with the domains google. stanford. edu and z. stanford. edu. The domain name for Google was registered on September 15, 1997 and the confederacy was combine on September 4, 1998. It was based in a friends store in California. Craig Silverstein, a fellow PhD student at Stanford, was hired as the primaryly employee. In whitethorn 2011, the number of monthly unique visitors to Google surpassed 1 meg for the set-back time, an 8. 4 percent increase from May 2010 (931 gazillion). Mission of Google Google Inc. s an Ameri shadow world(prenominal) corporation which provides cyber lieu-related point of intersections and services, including Internet search, cloud computing, computer software product program program and advertising technologies. Advertising revenues from Ad lyric poem generate almost all of the familiaritys profits. Google is a globa l engine room loss leader which focussinges on improving the expressive styles people conjoin with information congener to the industry Internet and Computer software. The phoner rush is to head the worlds information and make it universally accessible and useful.Its product farm animals entangle Search Advertising, Display Advertising, Mobile Advertising, Tools for Publishers, Local, and Enterp try. Google has became one of the most recognized blemish in the world and achieved Market serving of 65. 5% (May 2011) in Search Engine headache. Google became the fourth bear-sizedst technology come with in USA. rapid growth since incorporation has triggered a chain of products, encyclopaedisms, and companionships beyond the conjunctions core web search engine. The company offers online productivity software including email, an seat suite, and fond ne bothrking.Googles products extend to the desk exceed as well, with applications for web browsing, organizing & editi ng photos, and instant messaging. Google leads the phylogenesis of the mechanical man liquid operating brass, as well as the Google Chrome OS browser-only operating system, found on vary net books called Chrome books. Google has been estimated to run over one one million million million servers in entropy centers around the world and process over one billion search requests and about twenty-four peta bytes of user-generated data every day. As of September 2009 Alexa listed the main U. S. focused google. com site as the Internets most visited website, and numerous international Google sites as universe in the top hundred, as well as some(prenominal) new(prenominal) Google-owned sites much(prenominal) as YouTube, Blogger and Orkut. Google samewise ranks number ii in the BrandZ brand equity database. The dominant commercialise slope of Googles services has led to criticism of the company over subject fields including privacy, copyright, and censorship. Googles Organiz ational tender governing According to Fortune and All Business magazines, Google is the fourth-most admired company in the unify States.Google was in like manner listed as the top company to work for in both 2007 and 2008. The main reason for this employee admiration is Googles cross-functional organisational anatomical structure, which the company keep ons though stellar leaders and innovative solicitude techniques. Motorola History of Motorola capital of Minnesota V. Galvin and his br early(a), Joseph E. Galvin, secure a battery eliminator personal impute line in Chicago. In September 1928 they named the company Galvin Manufacturing society. Galvin Manufacturing batchs first of all product they develop is a battery eliminator which allows electronic devices to run on electricity quite a than batter.The name Motorola was given to Galvins first car stereo. Motor stands for car and ola stands for sound. From 1936 onwards, Galvin production lines attend to out over by manufacturing communicates for cars and receivers up to 1947 where they contain their first television and the company name agitates from Galvin Manufacturing Corporation to Motorola further indeed continue manufacturing communication system mediums. In 1967, Motorola prolongs into the following countries Australia, Canada, France, Hong Kong, Israel, Italy, Japan, Malaysia, Mexico, Puerto Rico, South Korea, Taiwan, the join Kingdom and West Germany.In 1969, Motorola starts to supply the bailiwick Ameri dirty dog Space Agency (NASA) with radio equipment so astronauhts can communicate with their earthborn bases. The first man on the moon, Neil Armstrong communicated with farming whilst on the Moon using a Motorola Radio. In 2000 Motorola and General Instrument Corporation merged to enhance their services and in 2001 Motorola introduces the Motorola v60 phone the world first metallic element unsettled phone which is available on the cellular ne tworks GSM, TDMA and CDM A. In 2002 Motorola developed released a GPS chip that could be installed into consumer electronics to enable perspective positioning. in addition Motorola released a 3G which is transmitted over CDMA network. Finally, Motorola releases the Cross-Technology PoC product line that enables subscribers to apply push-to-talk connectivity across and between GPRS, CDMA2000 1X, and WiFi networks and Motorola releases Ojo Personal Video Phone. Ojo promises wideband connectivity and a video phone that doesnt break up which is commonalityly k presently with video phones. Mission of Motorola Motorola wants to make phone chargers to strap onto millions of owners bikes in emerging nations because meandering(a) phones are often the only pillowcase of phone they own.For many people in those countries, he tell, a mobile phone is often the first interaction with a computer or the Internet. worldwidely and locally, Motorolas mission is to make everything mobile communication, music, photos, In ternet, television. And oddly putt content wherever customers want it. Chris white from Motorolas multimedia experience department discussed what Zander called the two biggest customer frustrations getting music onto a mobile phone and getting pictures off of it. Motorola has partnered with Microsoft to bring DRM technology to its phones.Users pull up stakes be able to download music from a variety of online music stores into Windows Media Player. Songs can consequently be dragged, dropped and synched with the phone. In regard to photos, Motorolas new Rizr Z6 phone impart watch a 2-megapixel camera whose pictures can be sent wirelessly over Bluetooth to a Kodak EasyShare printer. Organizational structure of Motorola The company adopts a more tight schemeal structure compared to no(prenominal)ia and Ericsson and grants more self-confidence to the second level heed.Within divisions, the Vice Presidents of the individual(prenominal) segments are authorized to adopt the nobl e-minded organizational pattern as an example, intercellular substance advent for new product growing divisions/departments, whereas a line or cater structure for production area. The company esteems interdepartmental and cross functional teaming of employees and as well as adopts employee empowerments schemes to make well be generated the lacunae in organizational structure, caused collect to centralization of functions. The flat organization of Motorola enables the implementations of worry decisions at a faster rate.Concept of cost cogency Definition of cost energy faculty is the ratio of output to input. A system is cost efficient if, relative to another system, its output cost less per unit of input. A system increases its cost cogency when it maintains output with less than relative increase in input. Efficiency is sectiond into 2 parts, they are- allocative efficiency and x-efficiency. Allocative efficiency is come to with the allocation of given resources betw een chooseence uses in ways that maximize social welfare.X-efficiency is concerned with producing more output without any change in the allocation of inputs. It so focuses on inefficiencies such as overstaffing and managerial blow. The act of providence capital by qualification a product or performing an drill in a break way is energy precisely cost efficiency. Cost efficiency is a concept which is concerned with study contrary ways of achieving the same prey such that the most cost-effective choice leave behind be the to the lowest degree high-priced of the alternatives being compared. Cost efficiency takes into broadside not only the price, entirely other factors too.Cost efficiency is more expensive at first and in the prospicient run it get out save gold. This cost efficiency refers to the use of resources so as to maximize the production of beneficials and services. In accountancy, the cost is express more efficient than another (in relative terms) if i t can provide more reliables and services for society without using more resources. In absolute terms, a slip can be called efficient if No supererogatory output can be obtained without change magnitude the amount of inputs. Production speak at the lowest possible per-unit cost.These definitions of efficiency are not exactly equivalent, simply they are all encompassed by the view that a system is efficient if postal code more can be achieved given the resources available. The term cost efficiency is a situation in which an organization maximizes turn a profit and profit, impermanent hookup minimizing effort and expenditure. Maximization of efficiency is a balance between two extremes. Managed correctly, it reduces cost, waste, and duplication. The greater the efficiency, the more prospered organization suffers.The organizations today attempt to be more customer-responsive than efficient in this find, and the notion of such an ordered and impersonal efficiency has conf used favor in an era when creative thinking and innovation are measured as a competitive advantage. A oddment of media merc tump overise that is aimed at minimizing advertising expenses incurred while maximizing product human raceity to a target grocery store in terms of breadth and frequency of ikon. Maximizing cost efficiency in a marketing campaign is highly desirable for a trade since the greatest product exposure is achieved for the least amount of financial investment funds.Importance of cost efficiency The importance of cost efficiency programs within a company cannot be overstated. Companies that are losing money, need to increase profits, or must become more competitive need to thin expenses in order to succeed. Knowing how to implement effective cost reduction strategies can be the determining factor in the survival of a barter. Keeping a Competitive return A good manager understands the importance of cost reduction to the health of a company. Bloated expense acc ounts can eat up profits profligately.A cost efficiency de signing is one that focuses on lowering be in every business activity. The activities vary by type of business but the concept of cost reduction and its efficiency does not vary. The importance of cost reduction and efficiency be afters is related to the most common reasons why expenses must be cut in a business. subscribe to for change magnitude profits Improved competitive stand up P give company resources Reduce waste Improved productivity It is not easy to grapple in the market today.Rising prices, shifting fuel rates, global competition, varying labor rates around the world, and spiraling health insurance be harbour make cost control a moving target. Sometimes it seems that a company gets one set of expenses under control, and in the meantime, another area of the company begins experiencing cost overruns. It is a never ending battle to maintain company profitability. Cost efficiency can be achieved utiliz ing opposite approaches. A company can Reduce existing expenses sweep out-of-door unnecessary expenses Modify business strategies which refer the types of business expenses Replace higher expenses with lower expenses for same items The importance of cost efficiency strategies cannot be understated, especially when a company is struggling to maintain profitability. Areas that can be reviewed for expense reductions include the following. Telecommunications Leases Materials Office supplies sustentation costs Rent Utilities When a company must generate more silver as fast as possible, management give declare to decide which costs can be most in effect reduced.If the reduction is needed quickly, expenses cut first provide normally be those that are not fixed or at once tied to production. It is not a good base to drastically reduce expenses that produce the company product or service without careful evaluation. If your company understands the importance of cost effici ency as a machine to increase profitability, the company exit have a much intermit regain of remain lucrative no military issue what stage of the economic cycle is occurring. That is because cost efficiency is an effective tool that can be responsive to a companys need. Managing expenses is right as of import as managing revenue.A timed review of costs can hamper a company from wasting money resulting from bad habits. No matter whether it is good times or bad, the importance of cost efficiency strategies never changes. Consequences of cost inefficiencies The theory of inefficiency states that the distribution of resources between alternatives does not fit with consumer taste (perceptions of costs and benefits). For example, a company whitethorn have the lowest costs in productive terms, but the result whitethorn be inefficient in allocative terms because the true or social cost exceeds the price that consumers are unstrained to fix for an purposeless unit of the produ ct.This is true, for example, if the buckram produces pollution (see to a fault external cost). Consumers would prefer that the firm and its competitors produce less of the product and charge a higher price, to attribute the external cost. Cost plays an important billet in outpouring play of the business. Unfortunately, a business or a firm or an organization faces many chores due to unseemly use of interchange held with them. In other word, it is also verbalize as lining the consequences of cost inefficiency.Organizations have different rank of line of works than their large counterparts, due to their inability to revel some of the same advantages in the marketplace. some of these problems are due to revenue and bills-on-hand availability when the bills come due. But confronting these obstacles before they become a headache can aid you to keep back them from becoming a study(ip) issue for your company through the study of cost efficiency. Following are the conse quences set about by an organization- Cash strike The most important issue to any small business entrepreneur is cash in flow.It does not avail a small business to have a profitable upcoming quarter already signed on the dotted line, if the birthroll for this Friday does not have suitable funds to pay your employees. Businesses which book revenue in advance, but do not realize the income for a period of months afterwards, must be especially careful with this timing. The hereafter ledger whitethorn be showing nothing but green, but if the cash-on-hand dips into the red, a crisis whitethorn be coming sooner than your revenue can forestall it. Maintain lines of credit sufficient to keep your cash flow healthful as necessary, and keep a rainy day account if possible.Unforeseen Expenses Start-up companies and small businesses frequently run airless to the bone and may be profitable only so long as unplanned events never occur. A retail store which clears $cl,000 per socio-eco nomic class after expenses may seem to be in good shape, until a slip-and-fall effort against the store awards the plaintiff $1. 3 million and in that respect is no insurance coverage. Even smaller expenses, such as a one-time government levy on all businesses in a region, or a rise in the cost of goods, can cause a major change in the bottom line.Use your available credit when you need to tide over your short cash crunch, but keep a bordering eye on your long-term profitability to promise that your overall liquidness is not threatened by the change in costs. Catastrophic Change A large corporation will plausibly survive the loss of a list executive to a debilitating disfigurement or death, but these things frequently close small businesses when that person represents a large chunk of the available labor pierceespecially when the entrepreneur herself is that person. Likewise, a natural disaster or other major disruption can close a business for weeks or months.Whenever p ossible, have cash on hand and business policies to ensure that you will be able to open up as soon as possible, or wether the temporary loss of a find out employee, and then check your business plan to see if any of your prior assumptions have been changed by the new circumstances in one case the organization identifies the sources of waste, and how much it is costing business, it should facial expression at the most cost-effective way to reduce it. Its a good idea to focus initially on quick wins things you can do immediately that will reduce waste almost instantly. You baron also want to witness uick fixes set in place a temporary solution to a problem to give you time to design a more permanent answer. It is essential to give antecedency to cost improvements, as making a change to eliminate a problem might not forever and a day be cost-effective. The main focus should be on crafting with those problems which are most costly to the business because it will have the bi ggest advert on your profits. A case study Google acquire Motorola mobility About the Deal The Google, online freak on 15 deluxe, 2011 make an proclamation to acquire Motorola Mobility, a maker of handsets and other electronic devices.Google vigilance Agreed to buy Motorola Mobility for $ 12. 5 billion. This is the largest surprising attainment by Google paying a premium of 63% to the 12th tremendous, 2011 closing price ($40. 00 per voice) of Motorola Mobility. The carry on not only treated as a surprise, it will have a big impact on the mobile industry too. Motorola shareholders will get $40 a share in cash, the companies express in a statement today. Thats 63 percent more than Motorola Mobilitys closing price on the modern York Stock Exchange on Aug. 12. twain boards have approved the takeover.This is a unsloped Merger (which companies at different places in a chain of products join together). Here, computer ironware knob (Motorola) acquired by the Software Client (Google) Google expects to complete the transaction by aboriginal 2012. As recently as March, the have was slowed to a crawl when the Chinese government expanded its investigation of the purchase. China at pass cleared the demand this past weekend. Google had current approval for the push-down store from both the U. S. section of Justice and the European Commission in February. The purchase also was approved by officials in Israel and Taiwan, leaving China as the last holdout.The purchase will divine service Google play off itself against various observable infraction lawsuits over the humanoid operating system, since Motorola has one of the smart-phone industrys largest homely libraries. Page also hailed the purchase as something that will allow Google to gain a bigger foothold in the mobile market. A Google phone running mechanical man could be very sellable not only to consumers but to IT departments that need to outfit workers with mobile devices. Basically, own ing both the handset ironware and the operating system could be a powerful combination that could rag android adoption.Google has been working to expand its business into other computer ironware ventures. With Motorola, Google may be better able to push its way into the home entertainment market with its Google TV curriculum. In addition to being a world-renowned smart-phone maker, Motorola also is a major fraud in the home set-top rap sector. wherefore Google plans to buy Motorola mobility? Google is moving into ironware, which is very different from what theyve done all along, said Darren Hayes, a computer science prof at Pace University. Its very unvoiced for a company to be able to be a victorious software and hardware company.It worked for orchard apple tree to be in the hardware and software industries, but not all companies have been that successful. Googles move toward Apples close management of software and hardware signals a deflexion from its previous path an d suggests Google may be dissatisfied with its current software licensing arrangements, which have led to the proliferation, but also fragmentation, of its android mobile operating system. Google is moving into hardware, which is very different from what theyve done all along, said Darren Hayes, a computer science professor at Pace University. Its very difficult for a company to be able to be a successful software and hardware company. It worked for Apple to be in the hardware and software industries, but not all companies have been that successful. Googles move toward Apples close management of software and hardware signals a departure from its previous path and suggests Google may be dissatisfied with its current software licensing arrangements, which have led to the proliferation, but also fragmentation, of its humanoid mobile operating system. or so directly, the contain marks a defensive blind in the high-stakes unvarnished war that has confront the worlds largest technol ogy companies against one another in dozens of drawn-out intellectual stead (IP) disputes. Google CEO Larry Page framed the attainment as a federal agency to nurse Googles Android mobile operating system against anti-competitive threats by shoring up his companys inventory of ostensibles.Analysts agree that Motorolas 17,000 patents and 7,500 patent applications are a major win for Google, which lacks a copious portfolio of wireless patents relative to more completed shammers and has been vulnerable to lawsuits from the likes of Apple, Microsoft and Oracle. Over forty lawsuits have been filed against Android, and on overtaking patent disputes threaten to impose licensing fees on the software Google has given away to phone manufacturers for free, possiblely jeopardizing Androids explosive growth. Google is a relatively new entrant in the mobile space and does not have a bargain of mobile IP, so anything it can do to build up its IP in the wireless space will help reduce po tential risk to the company from lawsuits in the future, said ovum analyst Nick Dillon. If you work out at Motorolas history and role in pioneering mobile communications from the very start, youll see they have some really tonality patents that will be useful to Google. soon enough patents are only part of the story, experts say. The science suggests that Google sees itself as unable to adequately compete in the mobility market without its own handset manufacturer.Googles bet is that having greater control over smartphone software and hardware will help it move beyond the desktop and beyond search. Owning Motorola will allow Google, more than ever before, to create mobile devices that satisfy the web giants vision for what cellphones and tablets should be able to do. A new breed of Motorola smart-phones could be designed from the ground up to integrate Google products at every turn, from featuring the Google-plus social network to adding airless field communication chips that allow cell-phones to be substituted for credit cards via Google Wallet.Fundamentally, Motorola offers Google a twain from the digital to the physical world, and with it, a means of gaining valuable information about its users, such as their locations or what applications they use the most. though Google said that it will continue to clear its Android software, its mobile strategy will cease being at the tenderness of third-party handset manufacturers like HTC and Samsung. Instead, Google will able to dictate the price, distribution and features of its own line of devices. Google also stands to bolster its efforts to gain inroads into the brio room by preading to TVs. Google TV, which was unveiled lat year but was unable to gain much traction, may stand a better chance when paired with Motorolas set-top box offerings. Until now, Google has been essentially hands off when it comes to hardware it has offered its Android software to manufacturers at zero cost, without a having a say in the form of the phones Android will power. This dissipated and unorthodox strategy has allowed Google to gain enormous market share in very little time, overtaking Apple to strike 48 percent of the global smart-phone market, check to Canalys.To some extent, quality has been sacrificed for quantity as Android has expanded to more than 150 million devices made by more than thirty different manufacturers. Google frequently updates its Android software, but app developers, manufacturers and carriers are not always able to keep up, resulting in a proliferation of different versions of the Android operating system offering a range of experiences for users. Depending on Googles relationship with the handset manufacturer, or the manufacturers approach to upgrades, a consumer could purchase a smart-phone running outdated software, straight out of the box.Not all Android apps perform equally on different versions of the software, an issue that has been a source of frustration for users and developers alike. Googles new approach authoritative the smart-phone experience from end-to-end mirrors the vertical-integration strategy Apple has pursed with spectacular success, but one that has tardily been a bust for the likes of Nokia and Research in effect. Nokia, for example, recently ceded its top spot as the worlds largest smart-phone vendor to Apple and announced it would hold out its Symbian operating system in favor of Microsofts Windows Phone software.Google is staking billions on its ability to success in effect(p)y control both the software and hardware components of its companys devices all while not alter its partners, who have been instrumental in Androids rise and with whom Google will directly compete once the Motorola learning is complete. Google has had history of picking favorites, but its never directly competed with manufacturers, said Ovum analyst Dillon. Manufacturers have come out with statements of support. But whats said in general in on e thing, and whats said behind closed doors is another. Benefits of the deal Google and Motorola Mobility together will accelerate innovation and choice in mobile computing. Consumers will get better phones at lower prices. Motorola Mobilitys patent portfolio will help protect the Android ecosystem. Android, which is open-source software, is vital to competition in the mobile device space, ensuring hardware manufacturers, mobile phone carriers, applications developers and consumers all have choice. The purchase of Motorola Mobility by Google has excited some technophiles and horrify others.The first point of concern, at least from the customers perspective, is whether or not Motorolas Android smart-phone platform would become the exclusive domain of Google customers. The encyclopedism certainly puts Android operating systems on better footing as they compete against Apples iPhone, and with Googles capital resources, more money is sure to pour into Android technology. Following are some reasons why the Google-Motorola deal makes sense Integration may be all that matters in the wireless industry.Apples hardware-software-ecosystem business measuring brings better profit margins, can grab market share and seems to fascinate consumers. Googles Android effort could be a bit like herding cats. The larger brain is whether the vertically integrated model is the only one that works in the wireless industry. Google lands its patent treasure trove. If you consider that Google was going to pay nearly $4 billion for Nortels 6,000 wireless patents, $12. 5 billion for Motorola Mobility doesnt look like a big chunk of change. With Motorola Mobilitys patents, Google can fend off lawsuits.In other words, Google builds out its patent portfolio. On a conference call, Page called out patents as a big reason for the Motorola Mobility acquisition. Google gets a TV play. While Googles Motorola acquisition primarily revolves around wireless devices, thithers a strong suppor ting room play here. wherefore? Motorola Mobility has a significant set-top box business. In the cable length box world, there are two players Cisco and Motorola Mobility, which is the leader. Google will get significant relationships with cable providers and give Android more of a foothold.Theres a good chance that Google can keep hardware partners in the foldfor now. Page reiterated that Google will keep Android open source and work with partners such as HTC and Samsung. Also keep in mind that this Google-Motorola deal could win it some goodwill with hardware partners. Motorola was thinking about suing other Android hardware makers over patents. Googles acquisition would put an end to that. The deal forces Microsofts hand. When it comes to the art of war, Google and Motorola force Microsofts hand a bit.With the Google-Motorola deal, Page is basically acknowledging that theres no money in third-party operating systems in the mobile space. The effect Mobile software players need a hardware component. As a result, Microsoft may be forced to acquire a hardware player. Research in Motion and Nokia are prime takeover candidates. In any case, Microsoft will be confuse by a big acquisition. And Android boxes in Nokia and RIM. With Motorola, which has some endeavour credibleness and Android innovations, Google can enter the enterprise easier.As a result, RIM increasingly looks like the odd man out. Nokia is already under fire as it waits for Windows Phone 7 to gain traction. RIM is betting on QNX as an operating system. Google is indicating that the wireless market is a two-platform race. And those two horses are going to be Android and iOS. Challenges of the deal Google acquisitions may lead to serious channel conflict, it will lead to a direct competition with other hardware partners like Samsung, HTC etc. , and the hardware manufacturing is a very different area withGoogles core business.The deal raises the following major quarrels 1. HTCand Samsung, two of the trackAndroid-based smart-phone makers, feel about the fact that their partnerGoogleis now competing directly with them for hardware sales. 2. Need to change the perceptions of the Investors that are not sensed the deal in a compulsory way. 3. Management Cultures of Software and hardware companies are almost different it is one of the challenge for the Google while framing the policies that would not advert to management destructions or management failures 4.By this learnedness Google employee strength would increase by 19000 which in the end decrease the profits of the business. Its question to the management in effective economic consumption of man power in value generation. military rating of the Deal Swap ratio determination using market value method Particulars Google Motorola Market capital 1,71,94,00,00,000 11,21,00,00,000 beauteousness 46,24,10,00,000 1,73,20,00,000 Market capitalization of the merged entity 1,83,15,00,00,000 Share of google 93. 8% Sha re of mmi 6. 12% get off fusion equity of google 49,25,57,81,959 Post merger equity of mmi 3,01,47,81,959 Hence, 1 equity share of google is equal to 11. 6019003 11. 56 of mmi Market price at the time of deal (august 12) 563. 77 24. 47 Additional premium give to mmi 280. 8921499 49. 82% By this Market Valuation Method this deal is Viable for Google at a premium of 50% Why is Google willing to pay a 63% premium?Google is expecting the following benefits from MMI by this Acquisition. running(a) Benefits Google can Access all the product lines of MMI cell phone, set-top boxes and tablet which are having a very good market share Android software has made grand inroads in the smartphone market with 150 million devices and 550,000 activations a day. Now, Google can compete with Global loss leader like APPLE in future in hardware and software industry Accounting Benefits Tax benefit Acquiring loss making company by a profit making companyGoogle can make a tax advan tage each year work 2019 can utilize the losses. Synergy Expectations atomization and a Better The Android market is currently heavily fragmented but the developers facing problem for designing the applications by this synergism Google will solve this problem by building a better Android OS with a lot of applications. Diversification and Google Vallet Despite being a little over a disco biscuit old Google maintained the same portfolio now this deal brings new business focus hardware products, mobile computing. Invasion of reenforcement RoomThe Google TV user interface that was launched before in May, 2011and Motorola is a strong player in the set-top box and home devices market this plead can expand strawman of Google TV products into the living room. observable The mobile computing industry has become a hotbed for patent disputes and thrust in the patent war. Google having about 1,000-odd patents this acquisition gives access to more than 17,000 patents and 7,000 pending pa tents held by Motorola. Google will now be able to successfully defend itself against a barrage of patent lawsuits filed by Apple, Microsoft and other rivals Hardware and Software synergy (Vertical Integration)This results in product efficiency and cost efficiency. Apple secret to become No. 1 Technology Company integrating hardware and software and the results are iPhone, iPad, and iPod devices that have become leaders in their respective market segments. Views about the Deal Management View Larry Page, CEO of Google, said, I look forward to welcoming Motorolans to our family of Googlers. Mr. Page said I was confident this deal will be approved by regulators it staggeringly beneficial to consumers, For consumers, Once Motorola is owned by Google the handset maker could more sharp ncorporate a technology called Near written report Communications (NFC) that is used for mobile payments and is back up by a version of Googles Android called Gingerbread. Investors Perception abo ut the Deal Google This venturous move in entirely different kind of business, one that could destroy its partnerships (and margins) in one of its most important new Business Lines. Early Investors not perceive the deal in a prescribed way it results Google stock has gotten smacked in the pre-market. other fact that could be worrying investors is that the Google-Motorola deal includes a $2. billion reverse break-up fee. MMI The intrinsic Intention of MMI to get separated from its recruit company is to get out in a better price and by showing its market growth among its products it got a chance to exit in a premium price leads to huge wage hike in the stock prices. The official entropy report outlines how Google agitate against themselves and paid $4 billion more than the initial high-end target for bidding. The Self-Bidding War In July, Google started by go the idea of purchasing Motorola for a high-$20s, low-$30s (per share) figure. On August 1st, an official bid of $3 0. 0 per share was made. Over the course of the undermentioned week and a half, however, Google would make two additional bids $37. 00 and $40. 00 per share representing a full 33 percent increase from their initial offer, or $4 billion extra in total spent. How did Google get into a bidding war when no one else was bidding? It started before Google even made its initial offer. Googles Andy Rubin first approached Motorola in July, look to purchase the companys patent portfolio. This attempt to expand mobile patent assets stemmed from a failed attempt to acquire Nortels patent portfolio in April.However, Motorola CEO Sanjay Jha indicated that that it could be problematic for Motorola Mobility to continue as a stand-alone entity if it sell a large portion of its patent portfolio, according to the SEC filing. This prompted Google to look at buying the whole company rather than dependable its patents. Google then floated a low-$30s bid as an initial cap. On August 1, Google sent a letter to the Motorola Mobility hop on of Directors proposing an acquisition of Motorola Mobility by Google for $30. 00 in cash per share. Motorola has approximately 299 million shares currently, so that bid equated to $9 billion.In response, Motorola brought on Quatalyst Partners, an independent investment bank. It was a Quatalyst representative who contacted Google on August 5 and suggested a bid of $43. 50 per share or a total bid of approximately $13 billion total, according tothe New York Times. Google upped their bid to $37. 00 per share ($11 billion), but continued to push for a fast and confidential buy. Motorola and Quatalyst leveraged Googles specialty by declining the second bid and suggesting a proposed price of $40. 50 or higher. Google made the offer of $40. 00 per share, or $11. 96 billion.Added to the additional options and awards (approximately 29 million shares with alternate sources or pricing), we come to $12. 5 billion our last-place figure. Did Google O verpay? From the moment the $12. 5 billion figure was released, analysts called the purchase an inflated buy, and the acknowledgment that Googles initial cap would have been would have been closer to $9. 4 billion just affirmed that notion. After all, $40. 00 per share was a 63 percent increase when compared with Motorolas last after-market trading value. But Google wasnt just buying a company. More than anything, Google was buying patent protection.In the world of mobile, manufacturers are already signing patent licenses with Microsoft that cost $5 to $12 per unit, fighting battles against Apple, and Google themselves are involved in their biggest lawsuit yet with Oracle. In total, these lawsuits and licensing fees may cost Google and their partners billions of dollars, which explains why Google is willing to pay an inflated price. Google was also buying Motorolas repose They didnt want to get involved in a bidding war with competitors who could then use Motorolas patents against Android. By bidding against themselves, they distant the incentive to open the floor to public bids.It was an expensive move, but one that offered important legal protections and access to hardware technology in a key industry. Suggestions pick up factors that we feel need to implement in order to make this deal successful Google need to strengthen the following segments that creates synergy in value positioning. Management Efficiency Focus on stretegy that make effective use of newly added 19000 manpower Patent Efficiency First 17000 and plus remaining 7500 patents been used in new technology creation need by the market space Cost Efficiency set Implementation of control mechanisms over the business. pull in Maximization This was the ultimate objective of this acquisition if Google implemented all the strategies as per mentioned in this case it has more possibility to reduce the chances of failure of the deal. Can achieve its targeted knot stone Conclusion The concept of saving money by making a product or performing an activity in a better way is nothing but cost efficiency. So with the help of this project we can leave off that cost efficiency helps in increasing profits of the business organization.Cost efficiency improves the standard of an organization and makes it more competitive in todays business world. Most importantly, with the help of this theory of cost efficiency a company can deliver its resources and more obviously can use it in its future. Cost efficiency also helps in reducing wastage in organization. This leads to earning of more profit and less cost expenses. On the other hand, a business or a firm or an organization faces many problems due to improper use of cash held with them. In other word, it is also said as facing the consequences of cost inefficiency.Organizations have different range of problems than their larger counterparts, due to their inability to enjoy some of the same advantages in the marketplace. Most of these problems are due to revenue and cash-on-hand availability when the bills come due. But confronting these obstacles before they become a headache can help you to prevent them from becoming a major issue for your company through the study of cost efficiency. In case of Google purchasing Motorola mobility capacious Experts have been watching the current scenario what will be the Googles next step, how expeditiously will manage this Hardware product line.How effectively use these synergies if this synergy became successful Google will reach to the sudden highs in a short span of time can became the competitor to the Market leader Apple. Now, Google can compete with Global Leader like APPLE in future in hardware and software industry. Well, up till now Google have approach less consequences as the employees of the Google Inc. have being studying cost expenses and try to reserve its resources and patents. Bebliography and webliography List of website- www. mba. com www. marketing. about . com www. ehow. com www. ebrd. com