Pros and Cons of the Three Mergers
A business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service.
- More freedom.
- More room for high levels of cooperation throughout.
- Heavy emphasis on innovation.
- More adaptable to change.
- The merged company may try to gain monopoly power in the market.
- Can cause higher prices.
- Leaders have high level of responsibility, little control over team member.
A merger between two companies producing different goods or services for one specific finished product.
- Can allow a firm to operate more efficiently.
- Can control all phases of production.
- Usually don't lessen competition, which is good for the economy.
- People at the bottom feel less valued.
- Decisions can take time.
- Weak leadership can ruin the whole thing.
A merger between firms that are involved in totally unrelated business activities.
- Does not result in decreased competition.
- Allows for new products to be introduced to the market.
- Ability to move into high profit area.
- Escape from present business if market is too competitive.
- Better access to capital markets.
- Will only be successful if high level of management.
- Failure in one business will drag down the rest.
- Lack of management experience will end with bad results.