mergers and takeovers 3 Flashcards
1
Q
define conglomerate
A
where a business integrates with another business in a completely different market
- can be known as diversification
- spreads risks across a wider product portfolio
2
Q
problems of rapid growth
A
- outgrow your premises
- productivity can decrease/lower employee morale
- shortage of cash to meet expansion costs
- drop in quality of your products/services
- increase in staff turnover
3
Q
financial rewards of mergers and takeovers
A
- eos
- increased revenue and market share
- reduced competition
- diversification
- acquiring unique capabilities/resources
- International expansion
4
Q
financial risk of mergers and takeovers
A
- diseconomies of scale
- redundancies of duplicate staff
- cost if it all goes wrong
5
Q
other problems with mergers and takeovers
A
- clash of cultures
- unreliable merger partners
- overtrading
- lack of understanding of the new market may lead to the wrong promotional message
