1. Business Growth and Expansion

2. Business Combinations - Mergers
Merger = a combination of two or more businesses to form a single firm
Why Merge?
Efficiency – when two firms merge they only need one president instead of two – etc.
One corporation gives up its legal identity when two merge, but it may keep its name for marketing reasons.
Catch up or eliminate the competition
A company may merge to get away from bad publicity that the company received in the past.

3. Types of Mergers
Horizontal Merger = two or more firms that produce the same kind of product join forces. Vertical Merger = firms involved in different steps of manufacturing or market come together. Can you think of examples of mergers?

4. Examples:

5. Conglomerates
Conglomerate = a firm that has at least four businesses, each making unrelated products, none of which is responsible for a majority of its sales.
Why?
TO DIVERSIFY – Corporations are afraid to have all of their investments in one industry, they want to spread them out around more than one product.

6. Examples of Conglomerates

7. Multinational Corporations
Multinational = A corporation that has manufacturing or service operations in a number of different countries. SO it is a citizen of many different countries.
Strengths: Weaknesses:
Spread technology May influence political life
Generate new jobs in different areas Exploit the economy by paying low wages
Produce tax revenue for host countries Argument that they take away jobs at home