Question No. 6
- strategy is one type of internal growth strategy it involves expansion or growth of business
by entering into new product line
Answers
Explanation:
: M&A can be used to extend the reach of a firm in terms of geography, products or market coverage.
Consolidation: M&A can be used to bring together two competitors to increase market power by reducing competition; to increase efficiency by reducing surplus capacity or sharing resources, for instance head-office facilities or distribution channels; and to increase production efficiency or increase bargaining power with suppliers, forcing them to reduce their prices.
Building capabilities: M&A may increase a company’s capabilities. Instead of researching a new technology from scratch, for instance, acquirers may wait for entrepreneurs to prove an idea and then take them over to incorporate the technological capability within their own portfolio.
Speed: M&A allows acquirers to act fast—and this may be an advantage in itself, wrong-footing competition and changing the industry landscape faster than competitors can evolve in response.
Financial efficiency: This may allow a company with a strong balance sheet to combine with another company with a weak balance sheet, enabling the latter to save on interest payments by using