Mergers and JV's

What is a global merger?

• An agreement between two companies from the same country

• An agreement between two companies from different countries

• An agreement between two companies from neighboring countries

• An agreement between two companies from the same industry

What is a joint venture?

• A business entity created by a single individual

• A business entity created by the government

• A business entity created by one party

• A business entity created by two or more parties

What is the purpose of acquiring national/international brand names/patents?

• To provide instant market share

• To reduce global presence

• To decrease market share

• To increase costs

Why is spreading risk over different countries/regions important for businesses?

• To focus on risks in one specific country

• To eliminate all risks in different countries

• To reduce the risk associated with one individual country

• To increase the risk associated with one individual country

How can a business enhance supply chain management?

• By increasing the number of intermediates

• By producing in the country where it secures its resources

• By operating in a country different from where it secures its resources

• By avoiding direct contact with suppliers

What is the impact of gaining access to trade blocs for a business?

• It restricts the movement of resources

• It allows development in a large geographical area with free movement of capital

• It increases import taxes

• It limits the geographical area of operation

Why do businesses enter new markets/trade blocs?

• To undertake market development and find new sources of revenue

• To reduce opportunities for growth

• To avoid global expansion

• Due to lack of competition in the domestic market

How can joint ventures help businesses in emerging economies?

• By increasing setup costs

• By bringing knowledge and experience of a local partner

• By providing government approval for mergers

• By restricting access to new markets

Which of the following is an example of a horizontal merger/takeover?

• A chocolate producer buys another chocolate producer

• A chocolate producer buys a cocoa farm

• A chocolate producer buys a chain of coffee shops

• A chocolate producer buys a car producer

Which of the following is NOT a benefit to mergers and acquisitions?

• Greater market share

• Synergy

• Diversification

• Redundancies