The important reasons for merging is to cover the space in the company’s product, resources, extending market area and economies of scale, which the new combined entity will have when operated individually before. Economies of vertical integration helps to access significant control over the production process. Also through the new management, Operating profits can be raised by reducing wastages and redundancies from operations. Synergies are also an important reason for merging as the positive synergy could reduce the cost and drive up the revenues. In the merged firm, abundant skills and technology being pooled together and brings innovation in products and services.
There are various ways to grow a company. However, two major ways in which a company can grow is through inorganic and organic growth. Inorganic growth basically indicates that a company joins another company and become one operating entity. The Inorganic growth process can be achieved through two means: merger and takeover. In a merger, the two companies agree to combine the resources of the two companies so as to focus its operations on areas profitable to the two companies.
In 2002, the SEC adopted new rules and amendments to address public companies’ disclosure or release of certain financial information that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles. The accrual accounting is more popular and be widely used in business world because it produces more accurate and faithful financial statements that constitute better representation of actual circumstances than its main competitors. The major weakness of accrual accounting is that there is some time issue such like the time of occurred and time of recorded would probably be different and it increases the risk of financial information and the risk of correctness. Also, the accrual accounting generally cost more to operate compared with cash accounting
to present some strategy implications for traditional corporations willing to understand how to best compete in a profoundly changing market, as the advent of the share economy does reflect. In fact, to reach this dissertation’s goal, the aim of ‘Analysis 2’ is to understand, in light of the theory presented in the ‘Theoretical framework’ and the insights resulting from ‘Analysis 1’, the different reasons that have led these corporations to participate in the share economy and the motivations behind their specific strategies. For this part of the Analysis, the case study approach, and specifically a multiple-case study method, has been chosen. There are two underlying arguments, in favour of such a methodological choice. First, Yin (2009) claims that, in comparison to other methods, a case study research has the strength to examine in-depth the specific case within its “real-life” context especially when the boundaries between phenomenon and context are not clearly evident.
Often a firm begins using sales promotions to differentiate its product or service from the competition. If the promotion is successful and leads to a differential advantage (or even appears to do so), competitors may quickly copy it. When all the competitors are using sales promotions, this not only lowers profit margins for each firm but also makes it difficult for any one firm to hop off the promotional bandwagon. Percy (2008) on the other hand contend that there are costs associated with promotion, and when a promotion is too successful, the unexpected increased costs can have a
Expanding a business is key to increasing revenues and market penetration. There are two ways a company can grow, organic and inorganic growth. Organic growth occurs when a company increases sales and gains new customers utilizing the existing business (Davis - Growing a company by international acquisition, 2008). Organic growth could happen through increased marketing efforts or promotions. For instance, many businesses use online services, such as Groupon or RetailMeNot, to send targeted to promotions to customers in specific areas to drive new or repeat customers into their business.
Using this NPV method, the best project will be the strategic acquisition of Schnapps Brand as suggested by Nigel Humbolt. It is noteworthy to comment that while the capital spending of this project is under the capital spending limits of the company, it also brings diversity in the core business and is promissory in terms of market expansion. With the IRR of 28.7% and projected return of $134 million, accepting this project will provide substantial gain to the revenue figures and confidence of the shareholders. Therefore, on the basis of Equivalent Annuity, the projects will be ranked as follows: 1. Strategic Acquisition 2.
Gartner, W. believes that the entrepreneur is part of the complex process of new venture creation and research entrepreneur should focus on what they does. Entrepreneurs often proceed with a very different order of questions compared with administrators. Therefore, someone who discovers and identifies the opportunities is not necessarily an entrepreneur. It is very important to capitalize the opportunities. So entrepreneurs are identified by a set of behaviors which connect them with organization creation.
(Franz 2014)The strategic decisions encloses the feasibility of cooperative strategy – which enables them to form various partnerships with other members of Star Alliance, including partnerships within different segments of the Lufthansa group, and from its subsidiaries. This cooperative strategy allows collaboration of combining talents and resources with partners and alliances in order to provide quality customer service. (Franz 2014) Lufthansa’s strategy includes focusing on profitable growth, at the same time, maintaining their corporate structure development and upholding their key values. They make use of a highly decentralized corporate structure, which comprises of separate business centers, yet generating a centralized profit. (Franz 2014) The capacity to make steady enhancements to the expense structure is essential in order for Lufthansa to stay ahead competitors.
While a mature product is well established in the market and is likely to be part of every investor portfolio, it is equally likely to have a declining share in it may be due to the fact that when a new product assures a higher return for the same amount of risk as a mature one the latter seems to be less attractive for investors. The evolution of new products with huge reach also forces established products into