There Are Strict Guidelines To Merging Companies; In Fact,

1769 WordsMay 7, 20178 Pages
There are strict guidelines to merging companies; in fact, if two or more companies are merging and create a single corporation that has no room left for fair competition, the U.S. government may step in and disallow it (Jones, 2013). Fortunately, the merge into D-Bart industries did not fall into this category and the merger was deemed legal; therefore, it was allowed by the U.S. government. Consumers may wonder why a monopoly is a bad, however, it makes good sense. In fact, if products or services were only offered by one company, there would be no competition and consequently, there would be little price management. From a qualitative stance, a merger or acquisition should be advantageous for the client and the consumer (Ritchlin,…show more content…
government for fear of reduced nationwide competition for consumable office supplies (Fahey, 2016). This is a surprising turn of events as it would seem there is plenty of competition from online relater Amazon, as well as others that sell an abundance of office supplies like Costco and Wal-Mart. Perhaps the lack of brick and mortar establishments that Amazon does not yet have weighed heavily on this decision. The U.S. government is not simply acting like a bully to step in and refuse to allow this; consequently, it is attempting to ensure there is enough healthy competition to prevent price gouging. Other high profile mergers that appeared to have merit failed to provide a successful result; consequently, Kmart and Sears merged to form Sears Holdings in 2005. Mergers are often the result of corporations attempting to reduce the variability of its income or diversify its portfolio and increase revenue potential (Katz & Simanek, 1997). Regrettably, the much anticipated success did not come to fruition with the stifling success of competitors such as Target and Walmart. Perhaps the timing was off or it is just a sign of the times that brick and mortar stores continue to struggle against the online shopping giants such as Amazon. Questions do arise when the government steps in and prevents mergers such as Staples and Office Depot; what if this would help reduce the cost of goods sold by the newly aligned
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