Business Notes: The motives for takeovers and mergers and how these link with corporate strategy

To gain market share (market penetration (ansoff matrix))
- This will raise brand awareness and reputation
- Attract/ gain customers (acquiring customers from the other business)
- Economies of scale (Purchasing, technical, financial, managerial)

Eg. Morrisons' takeover of Safeway (Morrisons gained a greater market share)

To protect themselves from external circumstances
- Competition
- Recession

Spread the risk (market development (ansoff matrix))

Eg. Walmart's takeover of Asda

To remove competition
- Higher prices
- Less alternatives for customers

Eg. IAG's takeover of BMI

Acquire their assets
- Customers
- Property/ Land (tangible assets such as buildings)
- Intangible assets (intellectual property such as patents, knowledge, expertise and skills)

Acquire supplies

Gain synergies
- The sum of the whole is greater than the individual parts

Eg. Kraft's takeover of Cadbury

In reality there are quite often a number of reasons as to why companies takeover and merge with another company.

The most common reason as to why businesses takeover and merge are:
-To access new markets
- To maximise shareholder vale

Esjae x

Follow me on Twitter: http://twitter.com/esjaeofficial
Creator of Esjae Official blog: http://esjaeofficial.blogspot.com/
Creator of Dear Scott Collins Blog: http://dearscottcollins.blogspot.com/
Creator of The Dangerously Dirty Truth Blog: http://thedangerouslydirtytruth.blogspot.com/
Subscribe to me of Youtube: http://www.youtube.com/theofficialesjae
Add me as a friend on Facebook: https://www.facebook.com/esjaeofficial
E-mail me: esjae-official@hotmail.co.uk



Read More

Business Notes: The ethical environment and corporate social responsibility

Definition: Morally correct behaviour towards all stakeholder groups

Below are examples of stakeholders and the businesses social responsibility towards them:

Shareholder:

• Provide with upto date trading information
• Tell them if the business isn't doing well
• Pay fair appropriate dividend
• Be able to express views/ opinions/ concerns about how the business is run

Employees:

• Fair wages
• Safe working conditions
• Fair breaks
• Fair and transparent promotion

Government:

• Publish full accounts (fair and open publication)
• Avoid practices that will allow tax evasion

Consumers:

• Fair pricing (transparent and open) - not misleading
• Value for money
• Safe

Suppliers:

• Keep trade credit as short, appropriate as possible
• Pay within the appropriate trade credit period

Esjae x

Follow me on Twitter: http://twitter.com/esjaeofficial
Creator of Esjae Official blog: http://esjaeofficial.blogspot.com/
Subscribe to me of Youtube: http://www.youtube.com/theofficialesjae
Add me as a friend on Facebook: https://www.facebook.com/esjaeofficial
E-mail me: esjae-official@hotmail.co.uk

Read More