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Business Growth and Expansion

Business Growth and Expansion. Chapter 3 Section 2. Business Mergers. A merger is a combination of two or more businesses to form a single firm Reasons for mergers: Efficiency Catch up or eliminate their rivals Lose a corporate identity. Types of Mergers.

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Business Growth and Expansion

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  1. Business Growth and Expansion Chapter 3 Section 2

  2. Business Mergers • A merger is a combination of two or more businesses to form a single firm • Reasons for mergers: • Efficiency • Catch up or eliminate their rivals • Lose a corporate identity

  3. Types of Mergers • Horizontal Mergers take place when two or more firms that produce the same thing join together • Vertical Mergers take place when firms involved in different steps of manufacturing or marketing come together.

  4. Conglomerates • Type of firm with at least 4 businesses, each making unrelated products, none of which is responsible for a majority of its sales • Diversification of product is the main driving force behind the formation of conglomerates • Though still popular in Asia, conglomerates are not as sought after in the US

  5. Multinationals • A type of corporation that has operations in different countries • Popular because they spread technology across the world, bring in jobs, generate tax revenue. • They can influence politics in host nations, pay low wages, and take jobs away from their home nation.

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