Explain takeover with respect to strategy inplementation
Answers
Mergers and acquisitions are two frequently used methods for implementing diversifications strategies. A merger takes place when two companies combine their operations, creating in effect, a third company. An acquisition is a situation in which one company buys, and controls another company.
Horizontal mergers or acquisitions are the combining of two or more organizations that are direct competitors.
Concentric merges or acquisitions are the combining of two or more organizations that have similar products or services in terms of technology, product line, distribution channels, or customer base.
Vertical merges or acquisitions are the combining of two or more organizations to extend an organization into either supplying products or services required in producing its present products or services or into distributing or selling its own product and services.
Conglomerate mergers or acquisitions involve the combining of two or more organizations that are producing products or services that are significantly different from each other.
Organizations seek mergers and acquisitions for many reasons. The primary reason for large mergers and acquisitions is the potential benefit that can accrue to the stockholders of both companies. Synergy is often cited as a rationale for mergers.