How Mergers And Mergers Inevitably Improve The Performance Of The Businesses Involved?

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With reference to your own research and the item above, do you think that takeovers and mergers inevitably improve the performance of the businesses involved? Mergers and takeovers are forms of external growth within a business. External growth occurs when one firm decides to expand by joining together with another. A takeover specifically refers to the gaining control of a firm by acquiring a controlling interest in its shares (51%). Merger, on the other hand, means the joining with another firm to form a new combined enterprise, shares in each firm are exchanged for shares in the other. There are three types of integration: Horizontal; Vertical; and Conglomerate. Horizontal refers to the idea of one firm joining with another at the same stage of the same production process. It also allows for greater market share; achieves economies of scale; and an opportunity to enter a different market segment. An example of this would be Ford’s takeover of Volvo - both being car manufacturers. Vertical integration is when one firm joins with another at a different stage of the same production process. Forward Vertical is when the other firm is at a later stage and Backward Vertical is when the other firm is at an earlier stage. Vertical integration as a whole allows for a firm to control key stages of the production process; guarantees access to a market; and gains control of supplies. Companies such as Zara and American Apparel are vertically integrated, especially at key stages of

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