MANA 463 Lecture Notes - Lecture 12: Financial Statement Analysis, Horizontal Integration, Vertical Integration
25 Jan 2017
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Document Summary
Corporate strategy: organizational-level decisions that focus on long-term survival: Restructuring: includes turnaround, divestiture, liquidation, and bankruptcies (ch. Growth: includes incremental, international, and mergers and acquisitions. Buyers are typically focused on m&as to support growth strategies. Sellers have become more reluctant to sell due to issues with valuations of organizations and the economic climate. Merger: the consolidation of two organizations into a single organization. Horizontal merger: the merging of two competitors. Vertical merger: the merger of a buyer and seller or supplier. Conglomerate merger: the merger of two organizations competing in different markets. Acquisition: the purchase of an entire company or a controlling interest in a company. Consolidation: two or more organizations join and form a new organization. Companies merge for three reasons: strategic benefits. Operating synergy: the cost reduction achieved by economies of scale produced by a merger or acquisition. Vertical integration: the merger or acquisition of two organizations that have a buyer-seller relationship.
