Marketing Analysis : 1- Novartis

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.

Merging with another organization has downfalls of destroying wealth from the merger. Considering the buying price is important when merging, spending too much on the merger will impound the value after the merger. Some mergers do not create wealth so capital is lost through the merger. There is no guarantee of financial gain and every formula considered with focus, just as with an acquisition. The final decision dictated by the variables. One company merging with another company takes the debt and losses of those companies in the new formed company.

(a) In a merger agreement, the assets and liabilities of the firm which is being acquired end up being absorbed by the buyers firm. A merger could be the most effective and efficient way to enter a new market without the need of creating

Becoming a larger more efficient company with a strengthening competitive position opens up the opportunity for more mergers and acquisitions of competitors, suppliers and/or customers.

In addition, like any other merger between two firms, companies benefit from significant cost synergy during the implementation of an acquisition and/or merger with other company. For example, when two companies combine their strengths to complement each other, they restructure their operations and as a result several offices and sites are closed down which leads to the laying off of employees, consolidating services and software applications. All these changes, result in synergy savings for the new company.

AN example, in 2008, Hewlett Packet purchased Electronic Data Systems to enhance the services aspect of the partnering technology offerings (Yurko, 1996). Marketing networks now give companies much wider customer access including overnight services. One such merger is the Takeda Pharmaceutical Inc. Although distribution chains work great to increase the bottom line, these mergers are not well received by federal agencies like the Federal Trade Commission. The concern being monopolization which is when one company controls too much of a given industry. Another driver of mergers is a desire for a leadership change. Sometimes the owner of the high technology firms simply wants to sale out and has problems finding a successor within to take the helm. Hence, a merger holds an

When companies combine/merge the whole objective is to gain new opportunities, gain market share, grow the business, to become more innovative and to improve product offerings, utilizing/sharing the existing resources and data. From the case

For example the AOL company spent 186.2 billion on Time Warner when they merged in 2002 which made it the biggest merger ever. This was an unsuccessful merger as AOL based its model on dial up modems but consumers were switching to broadband. So subscribers ended leaving AOL and within 2 years AOL had about $99 billion wiped off its value. In 2009 the companies were de merged The advantages of merging with a company is you get shared power over the market, and also you make profits from both companies so your money increases.

2) Branding/Marketing- The merger of two entities in essence means that each individual organization needs to shed its individuality and adopt a common goal. Hence, the branding and marketing should echo the group’s identity and be integrated across divisions.

Moreover, it also offers economies of scale due to increase in size as average cost decline due to higher production volume. These kinds of merger also encourage cost efficiency, since redundant and wasteful activities are removed from the operations i.e. various administrative departments or departments such as advertising, purchasing and marketing. 2.

business, company can get great profit and cut out additional operational expense. It is also easier to manage one company rather than two companies. Therefore, merging is the best solution.

One major objective of mergers is to be able to reduce or fully eliminate the weaknesses that may exit in

The financial synergies of the deal would lead to improved economies of scale in financing. The size of the merged firm would increase the debt capacity and tax debt shield, therefore dilute financing costs.

Mergers are a form of consolidation where two or three companies merge and the identity of only the largest company remain intact and the smaller companies losses their identity.

The merging between two competing companies often results in increase in their market power. Although the merging of two top competitors and the giants in the market can raise suspicious activities, this isn’t the case in our scenario. The merging has being to the advantage of the customer who is always the top priority in the market industry. Although the merging has significantly boosted the quality of the package provided to the customer to produce a more robust package, the price of the product has remained the same at $3.00 per piece and in some instances; most of the products are being sold at a discount (Ravenscraft & Scherer, 2011). There are also more options for the customers to choose from and settle for the most