............................................. 6 5. Discussion of Merger Seeking...................................................................... 7 6. Conclusion..................................................................................................... 9 References / Bibliography Business organisation and policy 1. Introduction Many businesses attempt to improve their revenue stream or maintain a higher competitive advantage through the process of acquiring or merging with other successful companies. Corporations believe that they can gain a considerable growth potential, improve overall service delivery or produce better and more innovative products by consolidating talents that exist within the business being acquired and amidst the new business entity acquired. However, many board members and executives at these companies do not fully understand the realities of what affects successful acquisition and merger philosophy, with most of these driven by the external marketplace and external stakeholders. In order to understand what causes failures in merging and acquiring other firms, it is necessary to explore real-life case histories of two different companies with radically different success and failure outcomes after merger. Air France merged with KLM and found a considerable growth potential and synergy development, whilst Daimler-Chrysler suffered substantial loss of business competitiveness and capital growth after the merger. It is likely that board members and executives, despite such a high margin of failed mergers and acquisitions, continue to seek out these opportunities for a variety of financially-based rationales, for the potential benefits achieved with shareholders and stakeholders, and as a generalised strategic methodology to improve efficiency, productivity, and cultural development. This report examines the two merged company case studies and comes to a determination as to why businesses continue to seek merger and acquisition opportunities despite numerous failures in this process. 2. The case of Air France and KLM Air France and KLM were both highly successful airline carriers that found independent revenue growth in their home markets of France and the Netherlands respectively. Both airlines agreed that a merger would improve their competitive position in the airline marketplace and could develop long-lasting synergies that would ultimately lead to sales growth and cost reduction in key divisions of operations. The Air France and KLM merger should be considered a significant success in merger philosophy. Why is this? In key markets, Ryanair and other low cost carriers were beginning to expand their fleets by using lean models of operations that allowed for cost reduction to be passed on to consumers in the price of lower fares. This was impacting the profitability bottom line of both major carriers which had higher overhead costs and administrative costs associated with labour payments to maintain their broad hub networks. These low cost carriers were using dynamic pricing and were able to reduce marketing and advertising costs; thus, it was becoming more attractive to multiple target market consumers (Malighetti, Paleari and Redondi, 2009). Because of regulatory restrictions, Air France and KLM, separately and in their host countries and markets, could not adjust their costs of operations to successfully compete with Ryanair and other growing low cost carriers using penetration or dynamic pricing models. Together, however, it gave
Business Organisation and Policy: Why Do Mergers and Acquisitions Fail and Why Do Corporate Officials Still Pursue Them? BY YOU YOUR SCHOOL INFO HERE DATE HERE TABLE OF CONTENTS 1. Introduction…
In recent years mergers and acquisitions have been taking place as a strategic response to problems arising out of globalization. Consolidation is expected to provide a solution but half of all mergers end in disappointments. They fail to achieve the financial and strategic objectives.
Irrespective of what industry a firm or business operates in, if it is on the same value chain of production, any merger or take-over would be termed as a conglomerate as this would be an example of diversification. For example, if an apparel manufacturer buys an electronic chip manufacturing firm, it would be diversifying its presence in the corporate world.
The name of the chosen high street outlet is Topshop which sells fashion apparels in the high street outlets in London. This sector is one of the major economic sectors in the country, with retail sales reaching upto 221 billion pounds and employing round 3 million people with total 3, 00,000 shops in UK alone.
In accordance with this, the advantages and disadvantages of these strategic thought in relation to the development of primary/core strategy. It also attempts to look at the differences between the proponents and opponents of strategy, in that a discussion is based on why planning is much maligned by its opponents.
This is what is actually happening in the pharmaceutical industry, a sector well-known for its extreme reliance on applied research on diverse natural science disciplines (Koretz and Lee 1998).
The industry in its present setting shows that competition has become
Factors as political, economical, social, technological, environmental and legal were there to change the emotions around size. Transformation is still on.
Political environment can change the emotions towards sizes. In a country, where the government
Additionally, growth has been experienced because of intensive marketing campaigns from the described grocers and changes to consumer buying behaviour. This report identifies how this sector has achieved such rapid
The internal subcontracting is realized through the neighbour projects and are connected together in terms of deadlines or schedules. Subcontracting is also another way of outsourcing the internal activities such as manufacturing or supply chain management. Companies not
The report also includes a section covering scenario analysis of pharmaceutical industry with possible changes that might be experienced in the industry also being highlighted. The last section is dedicated to analysis of
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