4.2.4- reasons for global mergers or joint ventures

Question 1

What is a joint venture?

Answer 1

A commercial enterprise undertaken by 2 or more parties to collaborate on one project

Question 2

What is a cross border merger?

Answer 2

2 businesses join together to become one on a permanent basis

Question 3

What is a cross border acquisition?

Answer 3

A business buying another business

Question 4

What are the pros and cons of a joint venture?

Answer 4

Pros:
-access to knowledge and resources
-shared exposure to risk
-shared workload

Cons:
-50% fail
-cultural clash
-different management styles

Question 5

What are quick ways of entering new markets?

Answer 5

Mergers

Question 6

What are pros of acquiring national brand names?

Answer 6

-to get a good reputation
-acquire a good brand name
-strong brand loyalty= inelastic PED= increase prices

Question 7

Pros and cons of mergers:

Answer 7

Pros: cost saving, increase market power

Cons: cultural clashes, negative working environment