4.2.4 Reasons for Global mergers or Joint Ventures

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5 reasons for Global Mergers or Joint Ventures

- Spreading Risk over different countries

- Entering new Markets/Trade Blocs

- Acquiring National or International brand names or patents

- Securing resources/Supplies

- Maintaining/increasing Global Competitiveness

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What is a Global Merger

Two companies from different countries joining forces permanently.

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What is a Joint Venture

Companies working together on a specific project temporarily

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2 benefits of spreading risk over different countries

- Allows fluctuations in exchange rates to cancel each other out.

- Cancels out falls in sales in certain countries with rises in other countries

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Which method is best used for Entering new markets/Trade Blocs?

- A Joint Venture is usually the solution for this

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4 Benefits of entering new market via a Joint Venture with a company already there

- Allows advantage of local expertise

- Allows financial gain for the local business

- The UK company doesn't risk losing control of this branch

- Overcomes unfamiliar culture

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Acquiring National/International brand names/patents