Vivendi B Revitalizing a French Conglomerate Case Solution

1. Did Vivendi achieve synergy among its many businesses? If so, what kinds of synergy, and how did they achieve that? If not, what did they do wrong? Be as specific as possible!

Vivendi comprehensively failed to achieve synergy among the new acquisitions it made during the early 2000s as part of the expansion strategy in the media and entertainment business. The business operated in the environmental sector, which was far from the operational capacities of the communication sector. The French company miscalculated the cultural gap between France and the western states. The entertainment industry is primarily observed as the cultural teacher for the upbringing of their locals, along with solidifying the backgrounds of the people. However, the acquisition of American media houses was the major setback for the company as their strategy was not backed by the French government. Moreover, the company which sold its primary business to step into the new ones was targeted as the company’s cumulative debt amidst expansion kept on rising. The acquired companies posed a significant threat to the traditional business of Vivendi as the newly acquired business inherited the debt along the change. Messier’s strategy in return for the existing debts was the sale of existing assets of the company in order to ensure cash flow to satisfy the board of directors.

The company significantly faced pressure from the government as they were inflicting a western culture on their people; however, it is noticed that the capitalistic nature followed in the west was not a part of Europe despite globalization. Vivendi’s expansions into the entertainment industry meant for it to preach the traditions of France rather than bring the western culture into France. Thus, the lack of trust amongst the board members led to a sudden end in the reign of Messier as Vivendi’s CEO.