4.3.2.4 REASONS FOR GLOBAL MERGERS, TAKEOVERS OR JOINT VENTURES

0.0(0)
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
Card Sorting

1/7

flashcard set

Earn XP

Description and Tags

Study Analytics
Name
Mastery
Learn
Test
Matching
Spaced

No study sessions yet.

8 Terms

1
New cards

What is a merger?

When two businesses combine to form a single new entity.

2
New cards

What is a takeover?

When one business buys 51% or more shares of another, gaining full control of its operations

3
New cards

What is a joint venture?

Temporary partnership between two businesses to collaborate on a specific project while remaining separate entities.

4
New cards

Why might businesses merge, do takeovers or joint ventures?

  • spreading risk over different countries/regions

  • entering new markets/trade blocs

  • acquiring national/int’l brand names/patents

  • securing resources/supplies

  • maintaining/increasing global competitiveness

5
New cards

Why would businesses wanna spread risk over different countries/regions?

  • reduces risk associated w operating in one country

  • Because all countries are at different states if business cycle (recession or economic growth)

  • profits in one country can sustain the business in another country to overcome recessions etc

6
New cards

How can mergers/takeovers/jv’s help secure resources/suppliers?

  • The need for a middle man/intermediate to access suppliers is eliminated therefore costs are reduced

7
New cards

How can acquiring brand names/patents help a business?

  • Brand name means suppliers more likely to offer EoS

  • Branding is expensive - global brand means that there’s a reduced need to have local variations of brand

  • Global advertising and marketing (e..g Coca Cola) business getting more advertising at lower costs

  • Can charge high prices due to brand name

8
New cards

How can takeovers/mergers/jv’s help w competitiveness

  • increased global presence :. Easier to enter markets

  • Better customer service

  • Products can be adapted for local needs (glocalisation)

  • Supply management easy and cheap