Chapter 8.2 notes.

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Presentation transcript:

Chapter 8.2 notes

Growth Through Mergers merger – combination of two or more businesses to form a single firm; one firm gives up identity Reasons for merging – to grow faster; become more efficient; acquire or deliver a better product; eliminate a rival; or change its image.

Types of mergers horizontal – when two or more firms that produce the same kind of product join forces (ex: banks) vertical – firms involved in different steps of manufacturing or marketing join together. (ex: a car company merging w/ a tire co.) conglomerates – a firm that has at least four businesses, each making unrelated products, none of which is responsible for a majority of its sales. Purpose: to diversify

Multinational a corp. that has manufacturing or service operations in a number of different countries. The corp. is subject to the laws and taxes of the country each operation is located in. Example???

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