Business Mergers and Acquisitions Quiz

<p>Mitigation of diseconomies of scale (B)</p> Signup and view all the answers

<p>Job losses and restructuring (D)</p> Signup and view all the answers

<p>Lower prices for customers (D)</p> Signup and view all the answers

<p>Mergers or takeovers (A)</p> Signup and view all the answers

<p>Cultural clashes (D)</p> Signup and view all the answers

<p>Their shares are publicly available (A)</p> Signup and view all the answers

<p>To increase market share and access new markets (C)</p> Signup and view all the answers

<p>Duplication of resources (B)</p> Signup and view all the answers

<p>To form a single entity with equal sizes (C)</p> Signup and view all the answers

<p>Job losses (A)</p> Signup and view all the answers

<p>To spread exposure to risk by entering unrelated markets (D)</p> Signup and view all the answers

<p>Access to potential new markets (C)</p> Signup and view all the answers

<p>The high cost associated with diversification (D)</p> Signup and view all the answers

<p>The potential for synergy between companies (D)</p> Signup and view all the answers

<p>Resistance to change within the merged entities (D)</p> Signup and view all the answers

<p>Consolidation of redundant roles (A)</p> Signup and view all the answers

<p>Loss of executive power and redundancies (C)</p> Signup and view all the answers

<p>Due diligence to examine the firm's assets and liabilities (B)</p> Signup and view all the answers

<p>Access to an established business format (A)</p> Signup and view all the answers

<p>Loss of direct control (D)</p> Signup and view all the answers

<p>Improve operational control (A)</p> Signup and view all the answers

<p>58.75% (A)</p> Signup and view all the answers

<p>Job losses (A)</p> Signup and view all the answers

<p>Horizontal Integration (B)</p> Signup and view all the answers

<p>£1.1bn (C)</p> Signup and view all the answers

<p>Expanding product lines (D)</p> Signup and view all the answers

<p>A downturn in the external economic environment (A)</p> Signup and view all the answers

<p>Owning retail stores directly (D)</p> Signup and view all the answers

<p>Annual royalty fees to be paid (A)</p> Signup and view all the answers

<p>Conglomerate Integration (C)</p> Signup and view all the answers

<p>Direct control over each franchise location (A)</p> Signup and view all the answers

<p>Loss of focus on core business (D)</p> Signup and view all the answers

<p>7.4% (A)</p> Signup and view all the answers

<p>Increased control over retail strategy (B)</p> Signup and view all the answers

<p>Access to new markets (C)</p> Signup and view all the answers

<p>By increasing shareholder value (D)</p> Signup and view all the answers

<p>Collaboration leads to greater overall benefits (B)</p> Signup and view all the answers

<p>High initial investment (C)</p> Signup and view all the answers

<p>Complying with franchisor guidelines (D)</p> Signup and view all the answers

<p>Cost reductions from supplier discounts (B)</p> Signup and view all the answers

<p>Remove underperforming management teams (D)</p> Signup and view all the answers

<p>Franchisees pay royalties based on turnover. (A)</p> Signup and view all the answers

When two companies combine to form a single entity.

A merger between firms at different stages of production in the same industry.

A merger between competitors in the same industry.

A merger into unrelated markets, diversifying business interests.

A company buys or merges with its customer.

A company merges with a supplier or a firm at an earlier production stage.

Cost reductions expected from combining operations of merged firms.

The percentage of total sales in a market held by a company.

Cost advantages that businesses obtain due to the scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units.

A measure of how much the quantity demanded of a good responds to a change in price.

Growth achieved through merger and acquisition, rather than internal development.

An act of assuming control of a company by acquiring a majority of its shares, often in a hostile manner.

A notable example of a hostile takeover where Kraft acquired Cadbury to increase market share and enter new markets.

Benefits from takeovers include economies of scale, reduced competition, access to new markets, and gaining management experience.

Challenges associated with takeovers can include high costs, cultural clashes, and potential employee resistance.

Access to new markets, spreads risk, and opens opportunities.

High costs, risks, and limited expertise in new areas.

Merged companies' total value is greater than their separate worth.

Opposition arising during organizational changes post-merger.

Challenges that arise from differing company cultures during a merger.

Thorough examination of a company's assets and liabilities before a deal.

Final say in accepting or rejecting a merger deal based on perceived value.

Benefits like established formats and training provided by franchisors.

Loss of control, expensive fees, and possible brand damage.

Deliberate downsizing to improve operational control.

Strategies include closing branches and removing unprofitable products.

Downsizing leads to unemployment and potential protests.

Increase in employee departure rates due to insecurity.

An established system of providers for franchisees.

Ongoing payments made by franchisees to the franchisor.

When the sum of two businesses is greater than their individual parts.

Reasons include culture clash, resistance to change, and poor strategic direction.

Conflict that arises when merging different company cultures.

Access new markets, increase market share, and diversify products.

A legal agreement allowing one to use a brand's name and business model.

An individual or business that purchases the rights to operate under a franchise.

The business that grants licenses to franchisees to operate under its brand.

Annual fees paid by franchisees, usually a percentage of revenue.

Gives franchisees ready-made business opportunities and support.