تشابترات الملف بارت ١ Flashcards
What is Related diversification:
Related diversification: is a corporate-level strategy that is based on the goal of establishing a business unit in a new industry that is related to a company’s existing business units by:
Some form of commonality or linkage between value-chain functions of the existing and new business units.
What is Unrelated diversification:
Unrelated diversification: is a corporate-level strategy based on a multi business model with a goal to increase profitability through:
The use of general organizational competencies, and
Increase the performance of all the company’s business units.
What is Horizontal integration ?
Horizontal integration is a strategy of seeking ownership of or increased control over a firm’s competitors
Market power exists when a firm can:
Sell its products above the existing competitive level and/or Reduce the costs of its primary and support activities below the competitive level
What is the Horizontal Integration Guidelines
When an organization competes in a growing industry
When increased economies of scale provide major competitive advantages
Remember: monopoly is not allowed in many markets.
What is the meaning of merger ?
merger - is a transaction where two firms agree to integrate their operations on a relatively equal basis because they have resources and capabilities that together may create a stronger competitive advantage.
What is the meaning of An acquisition ?
acquisition - is a transaction where one firm buys a controlling or 100 percent interest in another firm with the intent of making the acquired firm a subsidiary business within its portfolio/group.
Whereas most mergers represent friendly agreements between the two firms, acquisitions sometimes can be classified as unfriendly takeovers.
What is the meaning of A takeover ?
A takeover - is an acquisition—and normally not a merger—where the target firm did not solicit/petition or ask the bid of the acquiring firm and often resists the acquisition (a hostile takeover).
What is the primary reason for acquisitions ?
enable firms to gain greater market power.
What is Horizontal Acquisition
when a competitor in the same industry is acquired, a firm has engaged in a horizontal acquisition. Horizontal acquisitions are often most effective when the acquiring firm integrates the acquired firm’s assets with its own assets.
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What is Vertical Acquisitions ?
has occurred when a firm acquires a supplier or distributor that is positioned either backward or forward in the firm’s cost/activity/value chain.
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What is Related Acquisitions
when a target firm in a highly related industry is acquired, the firm has made a related acquisition.
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Internal development of new products is often perceived by managers to be costly and represent high risk investments of firm resources.
T or F
True
The acquiring firm gains immediate market access.
T or F
True
What is the Problems in Achieving Successful acquisition?
Too large
Too much diversification
Integration difficulties - صعوبة الاندماج
Inadequate evaluation of target - عدم التقييم الكافي للهدف