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What is a merger?
When two businesses combine to form a single new entity.
What is a takeover?
When one business buys 51% or more shares of another, gaining full control of its operations
What is a joint venture?
Temporary partnership between two businesses to collaborate on a specific project while remaining separate entities.
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
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
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
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
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
