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"Are Mergers the most appropriate method of strategic growth in todays business environment?"
Pages 10 (2510 words)
In today’s business environment, it can be argued that mergers are the most appropriate method of strategic growth. The current business environment is dynamic hence it may be wise for companies to merge their operations in order to gain a large market share if the other company is poorly performing.
This will be followed by an explanation of key terms namely: mergers, acquisitions, alliances and joint ventures. The main body of the paper will identify the issues and challenges of external methods of strategic growth as well as well as to attempt to establish how these relate to today’s business environment. According to BusinessDictionary (2013), strategic growth is growth aimed at winning larger market share even at the expense of short term earnings. There are four broad growth strategies namely product development, diversification, market penetration and product development. Campbell, Gaule & Morrison (2005) also suggest that “growth in profits can come from improving the profitability of the existing revenue stream, expanding existing businesses by gaining market share or extending into new markets or products, or entering one or more new businesses by acquisition, joint venture or greenfield investment.” On the other hand, Liabotis (2007) posits to the effect that growth strategy can be achieved through growing the core business, growing by sub-segmenting the customers as well as growing adjustment opportunities. As a point of departure, it is imperative to explain the meaning of key terms highlighted above. ...
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