2. Objectives You will be able to explain how businesses can reinvest their profits to grow and expand You will be able recognize the reasons that cause firms to merge You will be able to identify two different types of mergers

3. Growth Through Reinvestment depreciation = non cash charge for the general wear and tear on capital goods Cash flow = the bottom line, the real measure of profits –Can be allocated to investors (as dividend) or reinvested in the business

4. Growth Through Mergers Reasons for merging: 1. grow faster — desire to be a bigger business quickly 2. efficiency—only need one CEO, CFO etc. 3. need for new product lines ex: phone companies bought cable tv companies to offer internet & phone as one package

5. 4. Catch up w/ or eliminate rivals ex: --Royal Caribbean and Celebrity Cruise merged to double in size to catch up to Carnival --Staples tried to buy Office Depot but the gov’t said NO—it would reduce competition too much

6. Types of Mergers HorizontalHorizontal --2 or more firms that produce the same kind of product --ex. Exxon and Mobile Ford and Volvo Disney and Miramax Bell Atlantic & GTE = Verizon

7. VerticalVertical --firms involved in different steps of manufacturing join together --Ex: oil company owns oil field refineries refineries gas station gas station

8. Conglomerate A firm that has @ least 4 businesses EX: Pfizer —makes prescription meds (Lipitor and Viagra), chewing gum (Trident, Dentyne), razors (Schick), cough drops (Halls), breath mints (Clorets and Certs) and antacids (Rolaids)

10. Antiperspirants, Deodorants, & Colognes Old Spice Secret Baby & Child Care Charmin Children’s Pepto Clearblue Easy Dreft Luvs Pampers Pampers Kandoo Pampers UnderJams Puffs Batteries Duracell Body Wash & Soap Camay Ivory Olay Old Spice Safeguard Zest Beauty – Makeup/Skincare CoverGirl Max Factor Braun Gillette Complete Skincare Olay Dish Washing Cascade Dawn Ivory Joy Feminine Care Always Tampax Hair Care/ Color Aussie Clairol Head & Shoulders Herbal Essences Infusium 23 Pantene Health Care Align Braun Clearblue Easy Fibersure Metamucil Pepto-Bismol Prilosec OTC PUR Vicks Household Cleaners Bounty Febreze Mr. Clean Swiffer Laundry & Fabric Care Bounce Cheer Downy Dreft Era Febreze Gain Ivory Tide Oral Care Braun Crest Crest Glide Crest Whitestrips Fixodent Gleem Scope Oral-B Shaving Braun Gillette Fusion Gillette M3Power Gillette SatinCare Gillette Venus Snacks Pringles

11. Consumer brands Acuvue Actifed Ambi Aveeno Bactidol Band-Aid Benadryl Benecol Bengay Benylin Bonamine Caladryl Carefree Clean & Clear Coach Coach Professional Coach Sport Codral Combantrin Compeed Conceptrol Cortaid Cortef Delfen Desitin Dolormin E.P.T. Efferdent First-Aid Gynol Healthy Woman Imodium Johnson's Baby Johnson & Johnson Red Cross Jontex K-Y Lactaid Listerine Listermint Lubriderm Luden's Micatin Monistat Motrin Motrin Children Myadec Mylanta Nasalcrom Neko Neosporin Neutrogena Nicoderm Nicorette Nizoral Nu-Gauze O.B. OneTouch Pediacare Penaten Pepcid Pepcid AC Polysporin Ponstan Priligy Purell Quantrel REACH Reactine Regaine Rembrandt Remicade RoC Rogaine Rolaids Shower to Shower Simply Sleep Sinutab Splenda St. Joseph Stayfree Steri-Pad Stim-u-dent Sudacare Sudafed Tucks Tylenol Tylenol Baby Tylenol Children Unicap Vania Visine Zyrtec

12. Multinationals Corporation that has manufacturing or service operations in a # of different countries Ex: GM, Ford, Nabisco, Mitsubishi, and Sony

13. In India