4.2.4 Reasons for global mergers or joint ventures

Question 1

What is a joint venture?

1

Answer 1

• 2+ companies in diff countries agree work together on project for fixed period of time

Question 2

Reasons for joint ventures?

3

Answer 2

• Entering trade blocs
• National or international brand names/patents
• Resources and supplies

Question 3

What are the main challenges of global growth via joint venture?
5

Answer 3

• Clash of cultures, ^over national boundaries
• Time zones
• Lang barriers
• Conflicting obj
• Not maintaining qual/ethics

Question 4

What is a merger?

1

Answer 4

• 2 firms agree to come together to create new, single business

Question 5

What are the pros of a takeover/merger?

4

Answer 5

• Quick growth
• Cost synergies (2 coming together - EOS)
• Diversification (>dependence on 1 product/customer)
• Market power (>comp, oligopoly), ^prices