about business

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A merger happens as two organizations combine to become one. An acquisition, on the other hand, occurs when a company purchases another and no new one is created (Auerbach, 2013). Many mergers and acquisitions involving large amounts of capital are taking place in the modern century. In this regard, different motivations are driving mergers and acquisitions. Obtaining alternative materials is one of them. Nike's takeover of Reebok is one example. The other goal is to expand into new countries or distribution networks. A merger between US Airways and America West, for example, will enable them to enter a larger market. The awareness of more productive economies of scale is another reason. An example is the purchase of Pharmacia Corporation by Pfizer (Gaughan, 2010).

Mergers and acquisitions are more common in healthcare, technology, financial services and retail sectors more than other fields (Cloodt, Hagedoorn & Van Kranenburg, 2006). It’s because the industries are monopolized by few companies thereby making it difficult for new entrants. They hence have no option but accept a lucrative offer from one of the giants.

Learning Activity 2

In the event of venturing into a business, some aspects and decisions have to receive consideration. They form the guideline for the determination of the suitable form of ownership and control of the firm (Hammond, Keeney & Raiffa, 2015). Among the decisions is the share of equity that you need. It would guide in selecting an appropriate business ownership type. The other considerations are on whether you want to avoid special tax and the legal structures? Are you willing to be the sole benefactor of the business? Will it be sustainable in the event of your absence among other issues (Zikmund, Babin & Griffin, 2013)? All those thoughts would form guidelines and a path that would finally lead to an outcome to execute.

References

Auerbach, A. J. (Ed.). (2013). Corporate Takeovers: Causes and consequences. University of Chicago Press.

Cloodt, M., Hagedoorn, J., & Van Kranenburg, H. (2006). Mergers and acquisitions: Their effect on the innovative performance of companies in high-tech industries. Research Policy, 35(5), 642-654.

Gaughan, P. A. (2010). Mergers, acquisitions, and corporate restructurings. John Wiley & Sons.

Hammond, J., Keeney, R., & Raiffa, H. (2015). Smart choices: A practical guide to making better decisions. Harvard Business Review Press.

Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2013). Business research methods. Cengage Learning.

October 25, 2022
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Business

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Nike Money Company

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