An extensive appraisal of each merger scheme is done to patternise the causes of mergers. These hypothesized causes (motives) as defined in the mergers schemes and explanatory statement framed by the companies at the time of mergers can be conveniently categorized based on the type of merger. The possible causes of different type of merger schemes are as follows: Horizontal merger: These involve mergers of two business companies operating and competing in the same kind of activity. They seek to consolidate operations of both companies. These are generally undertaken to: Achieve optimum size Improve profitability Carve out greater market share Reduce its administrative and overhead costs. Vertical merger: These are mergers between firms in different stages of industrial production in which a buyer and seller relationship exists. Vertical merger are an integration undertaken either forward to come close to customers or backwards to come close to raw materials suppliers. These Continue reading
International Business Strategies
What are the Driving Forces behind Globalization?
Globalization can be characterized by four factors; the growing worldwide interconnections, rapid, discontinuous change, increased number and diversity of participants, as well as growing complexity. According to the Dictionary of Economics the term; globalization, is defined as the geographical shifts in domestic activity around the world and away from the nation states. It can also be referred to the interdependence of economies, through the increase in cross-border movement of goods, service, technology and capital. Examples of such integrations can be seen in the growing presence of many multinational companies as they expand into new regions (i.e. McDonalds) and the outsourcing of manufacturing and services. Drivers of Globalization The four main areas of drivers for globalization are market, government; cost and competition. These external drivers affect the main conditions for the potential of globalization across industries, which are mainly uncontrollable by individual firms. Market drivers include areas such as common customer needs Continue reading
Case Study: Merger Between US Airways and American Airlines
On December 9th, 2013 the two airlines, US Airways and American Airlines merged to form the American Airline Group that turn out to be the major airline in the world. This merger was structured by the enlarged competition that airlines are countenancing in the business at present. The merger offered a prospect for both airlines to make use of the benefits of an extensive network that would effect subsequent to merging as countered to when each one operates separately. One of the foremost circumstances that encircled the merger was the imminent insolvency of American Airlines. The company in 2011 had filed for bankruptcy even though it relapsed to profitability the same year in July. The merger would enhance admission to opportunities of business for both airlines, particularly American Airlines that would decrease its coverage to financial risks, which were the preliminary grounds for the corporation filing for bankruptcy. The merger Continue reading
Case Study: L’Oreal Marketing Strategies in India
Before the facial cosmetics, L’Oreal was known as a hair-color formula developed by French chemist Eugene Schueller in 1907. It was then known as”Aureole”. Schueller formulated and manufactured his own productswhich were sold to Parisian hairdressers. It was only in 1909 that Schueller registered his company as “Societe Francaise de Teintures Inoffensives pour Cheveus,”the future L’Oreal. Scheuller began exporting his products, which was then limited to hair-coloring products. There were 3 chemists employed in 1920. In 1950, the research teams increased to 100 and reached 1,000 by 1984. Today, research teams are numbered to 2,000 and are still expected to increase in the near future. Through agents and consignments, Scheuller further distributed his products in the United States of America, South America, Russia and the Far East. The L’Oreal Group is present worldwide through its subsidiaries and agents. L’Oreal started to expand its products from hair-color to other cleansing and Continue reading
Global Marketing Strategies
Marketing strategy is one of the most interesting, challenging and important elements in international business. Compared with art and science, marketing strategy is more about people finding ways to deliver exceptional value by fulfilling the needs and wants of customers, shareholders, business partners and society. It is inherently driven by people and is always changeable which explains why making marketing strategy is difficult and significant. Moreover, a perfect marketing strategy that is executed without any flaws can still fail. Additionally, sometimes businesses get success despite having a general strategy or execution because marketing is complicated and flexible and the nature or characteristics of marketing can make planning strategy very difficult and frustrating. Marketing strategy has been a great challenge for each enterprise. To some degree, the difficulty of making marketing strategy highlights the extraordinary success of those famous business, for instance, Coca-cola, Starbucks, Best buy, Apple, etc. A global marketing Continue reading
Moving to Blue Ocean Strategy – Shift from Red Ocean to Blue Ocean
In global market today, it can be supposed that there are two typical kinds of oceans: read oceans and blue oceans. Of two sorts of market, red oceans are defined as a known space for all existent industries nowadays. On the contrary, blue oceans are regarded as an unknown area for industries which do not exist. As a result, red oceans present all existing rules related to business competition and industrial regulations. This market defines and determines the boundaries for all games and rules. In this market, companies strive to compete with their competitors and rivals in order to gain better benefit and dominate more market share of current demand. Therefore, red oceans provide for space for enterprises to focus on their competition for decades. However, the space is limited while competitive battles are becoming increasingly fierce. There are more and more participants wanting to invest in the same products. Continue reading