Practicing Success
Alpha company manufacturing kids apparel has taken over Beta company which also manufactures kids apparel at a small scale. What can be the primary reason for this kind of takeover ? |
Entry into new markets Regulatory issues Human resource issues Value addition |
Entry into new markets |
Mergers are often looked upon as a tool for hassle-free entry into new markets. Under normal conditions, a company can enter a new market, but may have to face stiff competition from the existing companies and may have to battle out for a share in the existing market. However, if the merger route is adopted, one can enter the market with greater case and avoid too much competition. Regulatory issues and Human Resources issues are reasons for failure of mergers. The concept of Value addition is not related to mergers. |