12 Questions
What is external expansion?
Expanding by working with other businesses
What is a merger?
When two firms join together to form a new, larger firm
Why does a firm take over a supplier according to the text?
To control the supply, cost, and quality of raw materials
How does taking over a customer benefit a firm?
Gives the firm greater access to customers
Which type of external expansion creates a firm with more economies of scale and a bigger market share?
Merger with a competitor
What happens when two unrelated firms join together in external expansion?
Expansion by diversifying into new markets
What did Kraft Foods Inc. achieve by buying Cadbury in 2010?
Became the largest seller of chocolate and confectionery in the world
Why do less than half of all takeovers and mergers succeed?
Because it is challenging to integrate two different businesses successfully
What may happen if a takeover bid is hostile and unpopular?
The takeover will create bad feelings and resistance among the stakeholders
How do mergers and takeovers often lead to uncertainty among workers?
By implementing cost-cutting measures leading to job redundancies
Which aspect can make it difficult for two firms to integrate after a merger or takeover?
Differing management styles and company cultures
What is a common result of mergers and takeovers in terms of workforce?
Making lots of people redundant
Learn about external expansion in business, including the difference between mergers and takeovers. Explore how businesses can grow quickly through collaboration with other companies.
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