reasons for global mergers or joint ventures Flashcards
1
Q
a global merger is
A
an agreement between 2 companies from different countries to join forces permanently
2
Q
joint venture is
A
created by 2 or more parties involving shared ownership, returns and risks
3
Q
5 reasons for merging or joint venturing
A
- spreading risk
- increase growth
- enter new market/trading bloc
- securing supplies/resources
- increasing global competitiveness
4
Q
4 positives of merging
A
reduce unit cost through economies of scale
spreads risk
reduce competion
addition of new skills
5
Q
4 positives of joint venture
A
gain access to expertise
share risk
establish presence in new markets
use existing technology
6
Q
3 negatives of merging
A
high short term cost
clash of culture
redundancy of workers
7
Q
3 negatives of joint ventures
A
may be unrealistic objectives
hard managing communication
clash of culture
