Advantages of Business Combinations in Modern Organizations
Discover the benefits of business combinations in enhancing competitiveness and efficiency. From cost savings to market expansion, these alliances result in economies of scale, increased innovation, and improved market positioning. By combining resources and expertise, firms can withstand economic challenges and capitalize on growth opportunities. Moreover, the strategic advantages include improved product development, market penetration, and financial strength, paving the way for sustained success in a dynamic business environment.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
ADVANTAGES OF BUSINESS COMBINATION BUSINESS ORGANISATION BY JAHANAVI DEO DEPARTMENT OF COMMERCE M.L ARYA COLLEGE,KASBA B.COM 1_UNIT 8_DATE-30/07/2020
Advantages of business combinations to combining firms 1. Business combinations eliminates Costs incurred for advertisement and sales promotion by different small firms can be saved if they combine together. eliminates wasteful wasteful competition competition. 2. When firms combine together, they can achieve economies economies of of scale scale. They derive advantages through bulk purchase of raw materials, and economies in production, marketing, finance etc. Their costs, therefore is low. Products can be sold at cheaper prices which increases their sales. achieve 3. If firms combine together, they can tap new consumer segments, engage in research and develop new products. This results in increased sales and profits. can explore explore new new markets markets,
4. Firms which combine together create entity entity. Such a large entity would have substantial resources. The resources can be used to acquire the latest technology, employ experienced and qualified talent and adopt the best practices in the business. create a a large large 5. Patents possessed by one of the firms can be used by all the combined firms and products be be produced produced on on a a larger larger scale products can can scale. 6. A combined firm can terms of pricing, level of supplies and sometimes may even enjoy monopoly power. can control control the the market market in
7. Small firms would find it difficult to survive recession and depression. If small firms combine together, the combined firm because of its huge resources and scale of operations would be able survive survive even even in in difficult difficult times times. able to to 8. Firms combining together can pool knowledge knowledge and and experience experience. All the firms in the combination can benefit from a vast pool of such shared knowledge. pool their their 9. The value of the combined firm s securities would be higher. It would help capital capital much much easily easily. help the the firm firm to to raise raise
10. Firms can plan their production according to market requirements. The risk can can be be reduced reduced to a great extent. risk of of overproduction overproduction 11. Common problems tackled tackled easily easily if they come together. They can represent their demands to the government in a unified manner. problems faced faced by by firms firms can can be be 11. Exporters generally prefer suppliers who can supply bulk quantities. Combined firms have large production capacity. Therefore they can demand demand for for exporters exporters and increase their sales. can meet meet the the
Advantages of business combinations to consumers 1. The combined firms have large financial resources. Utilizing these resources they would be able to produce better better quality services services which benefit the consumers. quality of of products products and and 2. A combined firm would be able to invest resources in research innovative products. Consumers would be able to upgrade themselves to better products which satisfy their their needs needs in in a a better better way way. to develop new and satisfy
3. Combinations result in large sized firms. Large scale firms enjoy economies of scale. Due to the benefits derived from economies of scale, they would be able to sell the products at cheaper cheaper prices prices benefiting the consumers. 4. A combined firm would be able to provide better quality of customer service, open more branches and produce different meet meet customer customer requirements requirements. different products products to to
