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Essay: Essay notes: What has to be considered when companies merger/cooperate

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  • Published: 4 October 2015*
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  • Words: 445 (approx)
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Learning Goals
1. Describe the changes of the external and internal factors and name advantages and disadvantages of the cooperating.
Advantages

  • More money for research and the development of a business.

Disadvantages

  • Less choice for the customer
  • Job losses
  • Higher prices (Sessoms, n.d.).

2. Explain different kinds of cooperation and give examples.
Merger

  • Two companies or organisations coming together to form a larger one. Some mergers can be like two companies coming together on equal terms, but others are more like takeovers for one of the businesses involved, as usually there is a dominant partner.
  • Examples: Frieslandbank and Rabobank / KLM and AirFrance

Strategic Alliance

  • A cooperation between two or more businesses that want to achieve something together. Something that would not be able to achieve on their own. Strategic Alliance are often formed between businesses that are based in different regions of the world. They share the benefits and the costs till the project is over.
  • Examples: Chrysler and Fiat

Public-Private Partnership

  • Cooperation between the public and private sector. The public provides the money and the private sector provides the knowledge.
  • Operation on public roads and highways
  • Example: NASA with Virgin Group

Joint Ventures

  • Two different companies co-operating for a limited time, or in a particular geographical area on a particular project, but keeping their own identities.
  • Examples: Vodafone and Telefonica / Toyata and BMW

Trade co-operator

  • Cluster of companies.

Acquisitions

  • Buying out a business
  • Example: Jaquar and an indian company

Out-sourcing

  • A business cooperate with another business for a particular thing
  • Example: Nike and China

License

  • Giving permission to produce the same product
  • Example: Coca-cola

Franchising

  • A shop is in more places and owned by different people
  • Example: McDonalds

(Marcus & Dam, 2012).
3. What opportunities are there (profit, investments, etc)?

  • More knowledge
  • More money to spend
  • Access to new markets
  • Decreased costs (Marcus & Dam, 2012)

4. What threats are there?

  • Economic impact
  • In the case of joint venture is everybody responsible
  • Time consuming
  • Cultural difference
  • More taxes (Robbins & Judge, 2009)

5. What could motivate companies to cooperate?
There are three reasons for collaborating
1. Cost-orientated
The parties collaborate because they want to reduce costs. They want economic benefit of it.
2. Position-orientated
The parties want to decrease the competition or want to expend in other markets.
3. Knowledge-directed
The parties collaborate because of the knowledge. They want to get a better reputation and want to innovate with the new knowledge.
(Marcus & Dam, 2012).
References:
Markus, J., & van Dam, N. (2012). Organisation & Management: An International Approach
(2nd ed.). Groningen: Wolters-Noordhoff.
Robbins, S. P., & Judge, T. A. (2009). Organizational Behaviour (13th ed.). Upper Saddle
River, N.J : Pearson Prentice Hall.
Sessoms, G. (n.d.). The Advantages of a Cooperative Business. Accessed on 21 November
2014 via http://smallbusiness.chron.com/advantages-cooperative-business-23592.html
 

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