3.1.3 Demerges

Question 1

Demerges

Answer 1

When a firm sells off at least one of the businesses it owns or splits itself into separate parts to create more firms

Question 2

Reasons for demerges

Answer 2

Reducing Diseconomies of Scale
Increased Business Focus
Cultural Differences
Remove Loss-Making Divisions

Question 3

Impacts of Demerge on the Firm

Answer 3

Business Focus
Removing Loss-Making Portions
Efficiency and Lower Costs per Unit

Question 4

Impacts of Demerge on the Employees

Answer 4

Job Losses
provide increased chances for advancement.
Less Complication in Daily Tasks

Question 5

Impacts of Demerge on the Consumers

Answer 5

Better Quality Products & Customer Service - Potential positive outcome.
Lower Prices - Cost savings passed on to consumers
Narrower Product Range if Unsuccessful - Reduction in variety and quality