4.2.4 Reasons for global mergers or joint ventures

Question 1

What is intellectual property?

Answer 1

Patent or copyright etc.
- It may be easier for a business to access intellectual property through a joint venture rather than on their own as it is expensive.

Question 2

Why might a business do a global merger?

Answer 2

• Access intellectual property.
• securing resources.
• Maintain or increase competitiveness (creates bigger markets)
• Gain international brand names and patents.

Question 3

What is a joint venture?

Answer 3

2 or more businesses create a business with shared ownership.

Question 4

What is the pros and cons of a joint venture?

Answer 4

Pros:
- Both businesses benefits from the other expertise and resources.
- Reduced risk for growth.

Cons:
- Culture clash.
- Conflicting interests due to different objectives.
- May be an imbalance of expertise and resources.