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Two Business Discussion Posts

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Two Business Discussion Posts

Discussion 1: A Global Factor

The global factor that pertains to the chosen market domain is mergers and acquisitions

(M&A) in which the involved transactions are concerned on the ownership of business

organizations, companies or their operating units are combined or transferred by joining and/or

purchasing other businesses and/or companies (King et al., 2004). M&A is a common global

factor pursued by businesses as a strategic management approach, and allows business

enterprises to embark on growth, shrinkage, as well as changing their competitive position or the

nature of their business (King, Slotegraaf & Kesner, 2008). In a merger, two businesses come

together and join forces to establish a new business, which is often given a new name. This

usually occurs seamlessly and/or smoothly because the businesses involved in the merger are

typically of similar stature and size, and sometimes the term “merger of equals” is used (Reddy,

Nangia & Agrawal, 2014). On the other hand, in acquisition, one business is bought by another

and generally the former is often smaller than latter and be allowed to run as a subsidiary or

absorbed into the parent company (Ranft & Lord, 2012).

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According to Collan and Kinnunen (2011), the dominant rationale adopted in explaining

and justifying M&A activity is that through merging and acquiring of businesses or firms is

aimed at reducing risk or improving financial performance. The company’s leadership should

respond by pursuing strategic mergers and acquisitions in order to create synergies in the long-

run through broader customer base, increased market share, as well as improved corporate

strengths of business. As a result, through an appropriate response of a company’s leadership

towards this global factor may lead to significant benefits. For instance, through strategic

mergers and acquisitions, the company leadership should be willing to pay the target firm a

premium offer in the outlook of the value envisaged to be created by the synergies arising from

the M&A process.

Discussion 2: PEST Technique Analysis

PEST technique analysis is a valuable tool that plays an imperative role in evaluating a

business environment. The technique considers four critical factors including political,

economic, social, as well as technological, which have the potential to significantly affect

businesses either positively or negatively when they are favorable or unfavorable respectively.

According to Schmieder-Ramirez and Mallette (2015), political factors in this technique are used

to describe the manner in which the government intervenes in economy. In particular, political

factors influence tax policy, trade restrictions, tariffs, environmental law, labor law, as well as

political stability (Lawrence & Nanni Jr., 2009). Collectively, these interventions by the

government eventually determine the favorability of the business environment. Moreover,

economic factors including exchange rates, interest rates, economic growth, and the inflation rate

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1 Name Course Instructor Date Due Two Business Discussion Posts Discussion 1: A Global Factor The global factor that pertains to the chosen market domain is mergers and acquisitions (M&A) in which the involved transactions are concerned on the ownership of business organizations, companies or their operating units are combined or transferred by joining and/or purchasing other businesses and/or companies (King et al., 2004). M&A is a common global factor pursued by businesses as a strategic management approach, and allows business enterprises to embark on growth, shrinkage, as well as changing their competitive position or the nature of their business (King, Slotegraaf & Kesner, 2008). In a merger, two businesses come together and join forces to establish a new business, which is often given a new name. This usually occurs seamlessly and/or smoothly because the businesses involved in the merger are typically of similar stature and size, and sometimes the term “merger of equals” is used (Reddy, Nangia & Agrawal, 2014). On the other hand, in acquisition, one business is bought by another and generally the former is often smaller than latter and be allowed to run as a subsidiary ...
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