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Questions and Answers
What is external expansion?
What is external expansion?
- Expanding only in the local market
- Expanding within the existing business structure
- Expanding by working with other businesses (correct)
- Expanding through government grants
What is a merger?
What is a merger?
- When a firm buys more than half the shares in another firm
- When two firms join together to form a new, larger firm (correct)
- When a firm diversifies into new markets
- When a firm takes over a competitor
Why does a firm take over a supplier according to the text?
Why does a firm take over a supplier according to the text?
- To reduce economies of scale
- To cut off the supply chain
- To control the supply, cost, and quality of raw materials (correct)
- To increase competition in the market
How does taking over a customer benefit a firm?
How does taking over a customer benefit a firm?
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Which type of external expansion creates a firm with more economies of scale and a bigger market share?
Which type of external expansion creates a firm with more economies of scale and a bigger market share?
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What happens when two unrelated firms join together in external expansion?
What happens when two unrelated firms join together in external expansion?
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What did Kraft Foods Inc. achieve by buying Cadbury in 2010?
What did Kraft Foods Inc. achieve by buying Cadbury in 2010?
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Why do less than half of all takeovers and mergers succeed?
Why do less than half of all takeovers and mergers succeed?
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What may happen if a takeover bid is hostile and unpopular?
What may happen if a takeover bid is hostile and unpopular?
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How do mergers and takeovers often lead to uncertainty among workers?
How do mergers and takeovers often lead to uncertainty among workers?
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Which aspect can make it difficult for two firms to integrate after a merger or takeover?
Which aspect can make it difficult for two firms to integrate after a merger or takeover?
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What is a common result of mergers and takeovers in terms of workforce?
What is a common result of mergers and takeovers in terms of workforce?
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