Impact of Legislation, Regulations, Mergers and Acquisitions Flashcards
What is the general view on competition?
Competition is good and the more that exists the better for society. Influences pricing and customer service
Name the 2 key elements of competition law
Anti-Competitive Behaviour – authorities should seek to minimise, could distort normal competitive characteristics
Prevention of Exploitation – restricting dominant position in the market
What is the International Organisation for Standardisation?
World’s largest developer of voluntary international standards.
Since 1947 – 20,000 standards
Covering – technology, business
What are the internationally accepted terms associated with international trade called?
International Commercial Terms – Incoterms
Describes the responsibilities focusing on place, cost and risk
What is the point in government applying tariffs and duties on imports?
Barriers to trade – make local/home produce more attractive
Raise revenues
What is the purpose of licencing import and export activities?
Control movement on certain types of goods
Barrier to trade
Items include: firearms, chemicals, medicines, livestock, plants
Trading without licence is a criminal offence
What’s the difference between Mergers and Acquisitions?
Mergers – between orgs of roughly equal power, equal say, create new orgs with new ownership and structure
Acquisitions – acquiring org take the lead, brands may still remain, friendly or hostile takeover
What are the main drivers for M and A?
Growth, synergy, economies of scale, executive aspiration, defensive strategy, capability
What are the opportunities M and A can bring to the buying org?
New investment, capabilities, reduced cost/economies of scale, efficiency improvements, quality improvements, enhanced customer service, geographical reach
What are the threats M andA can bring to the buying org?
Negative re-prioritising by new owners, renegotiation, stringent terms, changes in pricing, closure of production units, change in strategy, more bureaucratic
What elements need to be taken into consideration when valuing an organisation?
Why valuate? takeovers, mergers, shares, liquidation
The reason for sale (profitable vs non profitable)
Profit, assets, revenues, age, market share, trademarks, order book, ratios
name 5 benefits of using standards published by ISO to support international trade
cost savings, enhanced customer satisfaction, access to new markets, inc market share, environmental benefits, ISO promotes globalisation, reduce trade barriers, reduced variety
what are the main areas of competition law that apply to orgs to prevent unfair practices in international trading
cartels - agreements not to complete with each other,
bid rigging - agreement between competitors on pricing,
limits on production and capacity,
price fixing
what are the main reasons for regulating mergers and acquisitions?
could lead to a very large org capable of exploiting position,.
Infringement of competition, imposing unfair prices, effect on staff, shareholders and customers
