Merger and Acquisition Strategies

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YnhenGehqrnh

Economics

Description

  • Merger and Acquisition Strategies
  • Why are merger and acquisition strategies popular in many firms competing in the global economy?
  • What reasons account for firms decisions to use acquisition strategies as a means to achieving strategic competitiveness?
  • What are the seven primary problems that affect a firm’s efforts to successfully use an acquisition strategy?
  • What are the attributes associated with a successful acquisition strategy?
  • What is the restructuring strategy and what are its common forms?
  • What are the short- and long-term outcomes associated with the different restructuring strategies?

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Explanation & Answer

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Running Head: MERGER AND ACQUISITION STRATEGIES

Merger and Acquisition Strategies
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MERGER AND ACQUISITION STRATEGIES
Merger and Acquisition Strategies
1. Why are merger and acquisition strategies popular in many firms competing in the
global economy?
Several reasons as to why mergers and acquisitions are popular in the firms competing in the
global market are as follows:


Increasing global market power-increase of market power is attained through combining
of its resources hence increase in profit and market share. An increase in market share
automatically increases its market power. This is done through buying a competitor,
supplier, distributor or business in the greatly related industry.



Incapacitates entrants barriers-merger and acquisition overcome market entry barrier
connected with the company running in the market. Therefore, investments in large-scale
industrialized resources enable a firm to attain economies of scale hence rendering
competitive prices. Breaking into the current distribution chains facilitates convenient
goods for consumers.



Increased level of diversification- Acquisitions are a familiar strategy that a company can
employ to diversify. Through merger and acquisition, companies develop new ventures
and products in their existing markets as a result of market-related understanding and
familiarity.



Helps organizations build up new capabilities- Companies acquire a chance to try new
things or rather exploit available resources gained through market share. This increases a
chance for a company to be more innovative while trying to develop new products.



Helps o...


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