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Merger, Acquisition, and International Strategies Presented by http://helpwithmyhomeworks.com/ http://helpwithmyhomeworks.com/
Background • Competition has influenced the invention of various business strategies in modern industries • Objective: help organizations grow and achieve strong presence in markets and industries • Mergers and acquisitions one such business strategy http://helpwithmyhomeworks.com/
Definitions • Merger: partnership between companies pursuing a common goal • Acquisition: where one company buys a firm • Main attraction: cumulative returns realized in the combination • Involve buying out (acquisition) or partnering with (merger) another firm to acquire a bigger capital or market base for a bigger competitive advantage http://helpwithmyhomeworks.com/
Advantages of Mergers • No cash requirements • Firms avoid most of the expensive and time-consuming elements of asset purchases • Enjoy economies of scale and scope, hence greater potential for profitability, a stronger capital base, and sustainable operations • Market and industrial competitiveness advantages http://helpwithmyhomeworks.com/
Advantages of acquisitions • Reduced costs due to economies of scale • Higher efficiency in production process – higher returns from same or less production activity • Broader market for products • Increased competitiveness in industry and market • Cheaper tax obligations and responsibilities http://helpwithmyhomeworks.com/
Disadvantages of mergers/acquisitions • Risks of diseconomies of scale and scope if business becomes too large • Risks of inefficiencies if firm becomes too large for effective management • Risk of culture clash between different types of businesses • Risk of ineffective integration of the operations of two businesses • Often necessitates the redundancy of some workers http://helpwithmyhomeworks.com/
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