When buying a competitor in your market, what are some of the advantages, disadvantages that may occur?
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What should you look at and what would you consider to be the advantages and disadvantages of buying your biggest competitor in the marketplace.
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What should you look at and what would you consider to be the advantages and disadvantages of buying your biggest competitor in the marketplace.
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The big motivation to buy the competitor is to create a more competitive, cost-efficient company. The companies will come together hoping to gain a greater market share or achieve greater efficiency. Because of these potential benefits, target companies will often agree to be purchased when they know they cannot survive alone.
There are a variety of reasons that an acquiring company may wish to purchase competitor:
SYNERGY
Synergy is the magic force that allows for enhanced cost efficiencies of the new business. Synergy takes the form of revenue enhancement and cost savings.
BENEFITS OF LARGE SIZE
The mergers and takeover will create one of the largest consumer goods Company in the world. It will reap benefits of economies of scale and size by this takeover. A merger can also improve a company's standing in the investment community: bigger firms often have an easier time ...
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