4.2.4 Global Mergers + Joint Ventures

Question 1

Merger

Answer 1

2 companies join together to create one organisation

Question 2

Joint venture

Answer 2

Involves 2 separate businesses collaborating to achieve a shared goal

Question 3

Barriers to entry

Answer 3

Low rand awareness
Culture/language differences
Knowledge of the market
Costs from exporting

Question 4

Reasons for global mergers and joint ventures

Answer 4

Spreading risk
Entering new markets
Global comp
Accruing national/international brands
Securing recourses

Question 5

Spreading risk

Answer 5

Back up market in case of failure of one market

Question 6

Global comp

Answer 6

Merging can cause business to stay ahead and remain competitive

Question 7

Securing resources + suppliers

Answer 7

May choose to acquire the busi that provides it with these things.
Ensures long term stability
Reduces costs by removing value added by supplier

Question 8

Acquiring national/international brands

Answer 8

Strong brand = comp ad + add value to products
Buying a brand is much quicker than investing time and money into marketing