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Inshorts Pvt. Ltd. is hiring candidates for its new growth project. The HR team is conducting a campus placement drives in colleges. Since the position is required for growth project, HR asked one of the candidates whether the value of a merged firm will be greater or equal to the two independent firms. The candidate responded confidently that the value of a merged firm will be greater than the sum of two independent merging firms. Keeping in mind the above scenario, state whether the candidate has given a true statement or not.- a)True
- b)False
Correct answer is option 'A'. Can you explain this answer?
Inshorts Pvt. Ltd. is hiring candidates for its new growth project. The HR team is conducting a campus placement drives in colleges. Since the position is required for growth project, HR asked one of the candidates whether the value of a merged firm will be greater or equal to the two independent firms. The candidate responded confidently that the value of a merged firm will be greater than the sum of two independent merging firms. Keeping in mind the above scenario, state whether the candidate has given a true statement or not.
a)
True
b)
False
|
Sankar Gupta answered |
Understanding Mergers and Firm Value
Mergers can significantly impact the value of the firms involved. The candidate's assertion that the value of a merged firm will be greater than the sum of the two independent firms is indeed true under certain circumstances.
Key Factors Contributing to Increased Value
- Synergies: Merged firms often experience synergies, which can be operational, financial, or managerial. This means that the combined entity can achieve efficiencies and cost savings that the independent firms could not.
- Market Power: A merger may enhance market power, allowing the new firm to negotiate better terms with suppliers and increase pricing power with customers.
- Diversification: Merging can lead to diversification of products and services, reducing risk and potentially increasing revenue streams.
- Access to Resources: The merged entity may have better access to resources, including technology, talent, and capital, which can further enhance its value.
Exceptions to the Rule
However, it is essential to note that not all mergers result in increased value. In some cases, factors such as cultural clashes, integration challenges, and overestimation of synergies can lead to a decrease in value.
Conclusion
In conclusion, while the candidate's statement is generally accurate, it is contingent upon the successful realization of synergies and effective integration post-merger. Thus, the value of a merged firm can indeed be greater than the sum of its independent parts, validating the candidate's confidence.
Mergers can significantly impact the value of the firms involved. The candidate's assertion that the value of a merged firm will be greater than the sum of the two independent firms is indeed true under certain circumstances.
Key Factors Contributing to Increased Value
- Synergies: Merged firms often experience synergies, which can be operational, financial, or managerial. This means that the combined entity can achieve efficiencies and cost savings that the independent firms could not.
- Market Power: A merger may enhance market power, allowing the new firm to negotiate better terms with suppliers and increase pricing power with customers.
- Diversification: Merging can lead to diversification of products and services, reducing risk and potentially increasing revenue streams.
- Access to Resources: The merged entity may have better access to resources, including technology, talent, and capital, which can further enhance its value.
Exceptions to the Rule
However, it is essential to note that not all mergers result in increased value. In some cases, factors such as cultural clashes, integration challenges, and overestimation of synergies can lead to a decrease in value.
Conclusion
In conclusion, while the candidate's statement is generally accurate, it is contingent upon the successful realization of synergies and effective integration post-merger. Thus, the value of a merged firm can indeed be greater than the sum of its independent parts, validating the candidate's confidence.
Insights Ltd. is working on expanding the business. They are exploring various opportunities and strategies for their business growth. They planned to hire a new Marketing Manager. Satish appeared for an interview for the above position. During the
interview, the HR listed down the steps involved in exploring opportunities in an environment. In light of the above scenario, arrange the steps in correct order as Satish did it.
(i) Evaluating the ideas received from different sources to find a creative solution.
(ii) Identifying a product or service through innovation.
(iii) Opportunity spotting by analysing the needs and problems that exist in the environment.
(iv) Setting up a project and nurturing it to success.- a)(i), (ii), (iii), (iv)
- b)(iii), (i), (ii), (iv)
- c)(ii), (iii), (iv), (i)
- d)(i), (iv), (iii), (ii)
Correct answer is option 'B'. Can you explain this answer?
Insights Ltd. is working on expanding the business. They are exploring various opportunities and strategies for their business growth. They planned to hire a new Marketing Manager. Satish appeared for an interview for the above position. During the
interview, the HR listed down the steps involved in exploring opportunities in an environment. In light of the above scenario, arrange the steps in correct order as Satish did it.
(i) Evaluating the ideas received from different sources to find a creative solution.
(ii) Identifying a product or service through innovation.
(iii) Opportunity spotting by analysing the needs and problems that exist in the environment.
(iv) Setting up a project and nurturing it to success.
interview, the HR listed down the steps involved in exploring opportunities in an environment. In light of the above scenario, arrange the steps in correct order as Satish did it.
(i) Evaluating the ideas received from different sources to find a creative solution.
(ii) Identifying a product or service through innovation.
(iii) Opportunity spotting by analysing the needs and problems that exist in the environment.
(iv) Setting up a project and nurturing it to success.
a)
(i), (ii), (iii), (iv)
b)
(iii), (i), (ii), (iv)
c)
(ii), (iii), (iv), (i)
d)
(i), (iv), (iii), (ii)
|
Priyanka Khatri answered |
Correct steps are:
(iii) Opportunity spotting by analysing the needs and problems that exist in the environment.
(i) Evaluating the ideas received from different sources to find a creative solution.
(ii) Identifying a product or service through innovation.
(iv) Setting up a project and nurturing it to success.
(iii) Opportunity spotting by analysing the needs and problems that exist in the environment.
(i) Evaluating the ideas received from different sources to find a creative solution.
(ii) Identifying a product or service through innovation.
(iv) Setting up a project and nurturing it to success.
The acquisition of Mobilink Telecom Inc. by Broadcom is a proper example of:- a)Product extension merger
- b)Vertical merger
- c)Market extension mergers
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
The acquisition of Mobilink Telecom Inc. by Broadcom is a proper example of:
a)
Product extension merger
b)
Vertical merger
c)
Market extension mergers
d)
None of these
|
Arpita Nambiar answered |
Mobilink Telecom Inc. Acquisition by Broadcom: A Product Extension Merger
Introduction:
In the context of mergers and acquisitions, the acquisition of Mobilink Telecom Inc. by Broadcom can be categorized as a product extension merger. This type of merger occurs when two companies operating in the same or related industries combine their businesses to expand their product offerings and market reach.
Explanation:
The acquisition of Mobilink Telecom Inc. by Broadcom aligns with the characteristics of a product extension merger for the following reasons:
1. Expansion of Product Offerings:
Broadcom, a leading technology company specializing in semiconductor solutions, aims to diversify its product portfolio and enhance its capabilities through the acquisition of Mobilink Telecom Inc. Mobilink Telecom Inc., on the other hand, is a telecommunications company offering wireless communication services. By merging with Mobilink Telecom Inc., Broadcom can extend its product offerings to include wireless communication technologies, thereby expanding its presence in the telecommunications industry.
2. Synergies and Complementary Capabilities:
A product extension merger typically involves companies with complementary capabilities and synergies. In this case, Broadcom's expertise in semiconductors and Mobilink Telecom Inc.'s proficiency in wireless communication technologies create opportunities for synergistic benefits. The combined entity can leverage the strengths of both companies to develop innovative products and solutions for the market.
3. Market Reach:
The acquisition of Mobilink Telecom Inc. allows Broadcom to enter new markets and expand its customer base. By integrating Mobilink Telecom Inc.'s existing customer relationships and distribution channels, Broadcom can gain a competitive edge and increase its market share in the telecommunications industry.
Conclusion:
In summary, the acquisition of Mobilink Telecom Inc. by Broadcom is a proper example of a product extension merger. This strategic move enables Broadcom to diversify its product offerings, leverage synergies, and extend its market reach in the telecommunications industry.
Introduction:
In the context of mergers and acquisitions, the acquisition of Mobilink Telecom Inc. by Broadcom can be categorized as a product extension merger. This type of merger occurs when two companies operating in the same or related industries combine their businesses to expand their product offerings and market reach.
Explanation:
The acquisition of Mobilink Telecom Inc. by Broadcom aligns with the characteristics of a product extension merger for the following reasons:
1. Expansion of Product Offerings:
Broadcom, a leading technology company specializing in semiconductor solutions, aims to diversify its product portfolio and enhance its capabilities through the acquisition of Mobilink Telecom Inc. Mobilink Telecom Inc., on the other hand, is a telecommunications company offering wireless communication services. By merging with Mobilink Telecom Inc., Broadcom can extend its product offerings to include wireless communication technologies, thereby expanding its presence in the telecommunications industry.
2. Synergies and Complementary Capabilities:
A product extension merger typically involves companies with complementary capabilities and synergies. In this case, Broadcom's expertise in semiconductors and Mobilink Telecom Inc.'s proficiency in wireless communication technologies create opportunities for synergistic benefits. The combined entity can leverage the strengths of both companies to develop innovative products and solutions for the market.
3. Market Reach:
The acquisition of Mobilink Telecom Inc. allows Broadcom to enter new markets and expand its customer base. By integrating Mobilink Telecom Inc.'s existing customer relationships and distribution channels, Broadcom can gain a competitive edge and increase its market share in the telecommunications industry.
Conclusion:
In summary, the acquisition of Mobilink Telecom Inc. by Broadcom is a proper example of a product extension merger. This strategic move enables Broadcom to diversify its product offerings, leverage synergies, and extend its market reach in the telecommunications industry.
Which of the following types of franchises provide an organization with the right to manufacture a product and sell it to the public, using the franchisor’s name and trademark?- a)Product franchise business opportunity
- b)Manufacturing franchise opportunity
- c)Business franchise opportunity ventures
- d)Business format franchise opportunity
Correct answer is option 'B'. Can you explain this answer?
Which of the following types of franchises provide an organization with the right to manufacture a product and sell it to the public, using the franchisor’s name and trademark?
a)
Product franchise business opportunity
b)
Manufacturing franchise opportunity
c)
Business franchise opportunity ventures
d)
Business format franchise opportunity
|
Puja Kaur answered |
The correct answer is a Product Distribution franchise.
Patil wants to start his business by taking a franchisee of McDonalds. He is planning to take the franchisee with the aim of speedy growth. The only way he could think of if taking the franchisee and McDonalds is the most popular food joint. The only limitation he sees is ________.- a)Advertising and Promotion
- b)High initial investment
- c)Limited Risks and Liability
- d)Speed of Growth
Correct answer is option 'B'. Can you explain this answer?
Patil wants to start his business by taking a franchisee of McDonalds. He is planning to take the franchisee with the aim of speedy growth. The only way he could think of if taking the franchisee and McDonalds is the most popular food joint. The only limitation he sees is ________.
a)
Advertising and Promotion
b)
High initial investment
c)
Limited Risks and Liability
d)
Speed of Growth
|
Neha Sharma answered |
- Initial investment is the amount required to start a business or a project. It is also called initial investment outlay or simply initial outlay. It equals capital expenditures plus working capital requirement plus after-tax proceeds from assets disposed off or available for use elsewhere.
- Initial investment equals capital expenditures or fixed capital investment (such as machinery, tools, shipment and installation, more) plus a change in working capital, minus proceed from the sale old asset, plus tax adjusted profit or loss from the sale of assets.
State Whether the Following Statements are True or False.
Q. Internal expansion results from the gradual increase in the activities of the concern.- a)True
- b)False
Correct answer is option 'A'. Can you explain this answer?
State Whether the Following Statements are True or False.
Q. Internal expansion results from the gradual increase in the activities of the concern.
Q. Internal expansion results from the gradual increase in the activities of the concern.
a)
True
b)
False
|
Arshiya Choudhury answered |
Statement: Internal expansion results from the gradual increase in the activities of the concern.
Explanation:
Definition of Internal Expansion:
Internal expansion, also known as organic growth or internal growth, refers to the growth of a company through its own operations and activities. It occurs when a business expands its production, sales, and operations without merging with or acquiring other businesses.
Gradual Increase in Activities:
Internal expansion occurs when the activities of a concern gradually increase over time. This means that the company experiences a steady growth in its operations, such as increasing production, sales, revenue, and market share.
Reasons for Internal Expansion:
Internal expansion can be driven by a variety of factors, including:
1. Increased demand: As a company's products or services become more popular and in demand, it may need to expand its operations to meet customer needs and maintain market share.
2. Improved efficiency: By implementing more efficient production methods, streamlining processes, and investing in technology, a company can increase its productivity and expand its operations.
3. Market penetration: A company may choose to expand internally to penetrate new markets or reach new customer segments. This can involve opening new branches or stores, targeting new geographic locations, or diversifying product offerings.
4. Research and development: Investing in research and development can lead to new product innovations, allowing a company to expand its operations and gain a competitive edge.
5. Financial stability: A financially stable company with sufficient resources and capital can fund its own growth and expansion without the need for external financing or partnerships.
True or False:
The statement "Internal expansion results from the gradual increase in the activities of the concern" is True. Internal expansion occurs when a company experiences a gradual increase in its activities, which can include production, sales, revenue, market share, and overall business operations. It is a form of organic growth that allows a company to expand its operations without merging with or acquiring other businesses.
Explanation:
Definition of Internal Expansion:
Internal expansion, also known as organic growth or internal growth, refers to the growth of a company through its own operations and activities. It occurs when a business expands its production, sales, and operations without merging with or acquiring other businesses.
Gradual Increase in Activities:
Internal expansion occurs when the activities of a concern gradually increase over time. This means that the company experiences a steady growth in its operations, such as increasing production, sales, revenue, and market share.
Reasons for Internal Expansion:
Internal expansion can be driven by a variety of factors, including:
1. Increased demand: As a company's products or services become more popular and in demand, it may need to expand its operations to meet customer needs and maintain market share.
2. Improved efficiency: By implementing more efficient production methods, streamlining processes, and investing in technology, a company can increase its productivity and expand its operations.
3. Market penetration: A company may choose to expand internally to penetrate new markets or reach new customer segments. This can involve opening new branches or stores, targeting new geographic locations, or diversifying product offerings.
4. Research and development: Investing in research and development can lead to new product innovations, allowing a company to expand its operations and gain a competitive edge.
5. Financial stability: A financially stable company with sufficient resources and capital can fund its own growth and expansion without the need for external financing or partnerships.
True or False:
The statement "Internal expansion results from the gradual increase in the activities of the concern" is True. Internal expansion occurs when a company experiences a gradual increase in its activities, which can include production, sales, revenue, market share, and overall business operations. It is a form of organic growth that allows a company to expand its operations without merging with or acquiring other businesses.
State Whether the Following Statements are True or False.
Q. The merger between the Walt Disney Company and the American Broadcasting Company is an example of conglomerate merger.- a)True
- b)False
Correct answer is option 'A'. Can you explain this answer?
State Whether the Following Statements are True or False.
Q. The merger between the Walt Disney Company and the American Broadcasting Company is an example of conglomerate merger.
Q. The merger between the Walt Disney Company and the American Broadcasting Company is an example of conglomerate merger.
a)
True
b)
False
|
Kiran Mehta answered |
- A conglomerate merger is "any merger that is not horizontal or vertical; in general, it is the combination of firms in different industries or firms operating in different geographic areas".
- One example of a conglomerate merger was the merger between the Walt Disney Company and the American Broadcasting Company.
State Whether the Following Statements are True or False.
Q. In business format franchise opportunity approach, a company provides a business owner with a proven method for operating a business using the name and trademark of the company.- a)True
- b)False
Correct answer is option 'A'. Can you explain this answer?
State Whether the Following Statements are True or False.
Q. In business format franchise opportunity approach, a company provides a business owner with a proven method for operating a business using the name and trademark of the company.
Q. In business format franchise opportunity approach, a company provides a business owner with a proven method for operating a business using the name and trademark of the company.
a)
True
b)
False
|
Ishan Choudhury answered |
A business format franchise is a franchising arrangement where the franchisor provides the franchisee with an established business, including name and trademark, for the franchisee to run independently.
Prominent examples of well-known franchise business models include many food chain restaurants, such as McDonald's and Subway. Other examples of franchise opportunities are businesses like UPS and H & R Block. In the United States, there are franchise opportunities available across a wide variety of industries.
Prominent examples of well-known franchise business models include many food chain restaurants, such as McDonald's and Subway. Other examples of franchise opportunities are businesses like UPS and H & R Block. In the United States, there are franchise opportunities available across a wide variety of industries.
State Whether the Following Statements are True or False.
Q. The operations manual is the part of the agreement that outlines the type of relationship a franchisee is entering into with the franchisor.- a)True
- b)False
Correct answer is option 'B'. Can you explain this answer?
State Whether the Following Statements are True or False.
Q. The operations manual is the part of the agreement that outlines the type of relationship a franchisee is entering into with the franchisor.
Q. The operations manual is the part of the agreement that outlines the type of relationship a franchisee is entering into with the franchisor.
a)
True
b)
False
|
Amrita Kumar answered |
Understanding the Operations Manual in Franchising
The statement claims that the operations manual is part of the agreement that outlines the relationship between a franchisee and franchisor, suggesting that it is a formal element of the franchise agreement. However, this assertion is false.
What is the Operations Manual?
- The operations manual is a comprehensive document provided by the franchisor.
- It contains detailed guidelines, procedures, and standards that a franchisee must follow to operate the franchise successfully.
Role of the Operations Manual
- While it plays a crucial role in guiding franchisees, it is not a legal part of the franchise agreement.
- The manual functions more as a reference tool, detailing the day-to-day operations, marketing strategies, and brand standards.
Franchise Agreement vs. Operations Manual
- The franchise agreement is a legal document outlining the contractual relationship between the franchisor and franchisee.
- It includes terms related to fees, duration, rights, and obligations, establishing the formal relationship.
Conclusion
- Therefore, the correct answer to the statement is option 'B' (False).
- The operations manual does not define the nature of the relationship but rather serves as an operational guide once the relationship has been established through the franchise agreement.
The statement claims that the operations manual is part of the agreement that outlines the relationship between a franchisee and franchisor, suggesting that it is a formal element of the franchise agreement. However, this assertion is false.
What is the Operations Manual?
- The operations manual is a comprehensive document provided by the franchisor.
- It contains detailed guidelines, procedures, and standards that a franchisee must follow to operate the franchise successfully.
Role of the Operations Manual
- While it plays a crucial role in guiding franchisees, it is not a legal part of the franchise agreement.
- The manual functions more as a reference tool, detailing the day-to-day operations, marketing strategies, and brand standards.
Franchise Agreement vs. Operations Manual
- The franchise agreement is a legal document outlining the contractual relationship between the franchisor and franchisee.
- It includes terms related to fees, duration, rights, and obligations, establishing the formal relationship.
Conclusion
- Therefore, the correct answer to the statement is option 'B' (False).
- The operations manual does not define the nature of the relationship but rather serves as an operational guide once the relationship has been established through the franchise agreement.
The main ingredients of a franchise agreement:- a)Contract Explanation
- b)Operations Manual
- c)Proprietary Statements
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
The main ingredients of a franchise agreement:
a)
Contract Explanation
b)
Operations Manual
c)
Proprietary Statements
d)
All of the above
|
|
Naina Sharma answered |
- Contract Explanation: Contract, in the simplest definition, a promise enforceable by law. The making of a contract requires the mutual assent of two or more persons, one of them ordinarily making an offer and another accepting. If one of the parties fails to keep the promise, the other is entitled to legal redress.
- Operations Manual: The operations manual is the documentation by which an organisation provides guidance for members and employees to perform their functions correctly and reasonably efficiently. The operations manual helps the members of the organisation to reliably and efficiently carry out their tasks with consistent results.
- Proprietary Statements: Proprietary information, also known as a trade secret, is information a company wishes to keep confidential. Proprietary information can include secret formulas, processes, and methods used in production.
State Whether the Following Statements are True or False.
Q. The person offering the franchise is known as the franchisee.- a)True
- b)False
Correct answer is option 'B'. Can you explain this answer?
State Whether the Following Statements are True or False.
Q. The person offering the franchise is known as the franchisee.
Q. The person offering the franchise is known as the franchisee.
a)
True
b)
False
|
Amita Das answered |
Franchising is an arrangement where franchisor (one party) grants or licenses some rights and authorities to franchisee (another party).
Franchisor authorizes franchisee to sell their products, goods, services and give rights to use their trademark and brand name. And these franchisee acts like a dealer.
Franchisor authorizes franchisee to sell their products, goods, services and give rights to use their trademark and brand name. And these franchisee acts like a dealer.
In 1955 Ray Kroc took over a small chain of food franchises and built it into today’s most successful fast food franchise in the world, now known as ___________.- a)KFC
- b)McDonald’s
- c)Burger King
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
In 1955 Ray Kroc took over a small chain of food franchises and built it into today’s most successful fast food franchise in the world, now known as ___________.
a)
KFC
b)
McDonald’s
c)
Burger King
d)
None of these
|
|
Neha Sharma answered |
Kroc is credited with the global expansion of McDonald's, turning it into the most successful fast food corporation in the world. Due to the company's growth under Kroc, he has also been referred to as the founder of the McDonald's Corporation.
Rohan and Aman are partners in a car parts manufacturing company. They are planning to expand their business and in order to grow Rohan suggested to merge with another car accessories company, however Aman wanted to acquire another car accessories company. Both mergers and acquisitions are enterprise growth strategies, but how they come into existence makes them different from each other. Which of the below statements justifies the given statement?- a)Merger is always friendly, whereas acquisition is always hostile.
- b)Merger may be friendly, whereas acquisition is always hostile.
- c)Merger is always dependent on synergy, whereas acquisition is never based on synergy.
- d)Merger is consensual, whereas acquisition is forced.
Correct answer is option 'D'. Can you explain this answer?
Rohan and Aman are partners in a car parts manufacturing company. They are planning to expand their business and in order to grow Rohan suggested to merge with another car accessories company, however Aman wanted to acquire another car accessories company. Both mergers and acquisitions are enterprise growth strategies, but how they come into existence makes them different from each other. Which of the below statements justifies the given statement?
a)
Merger is always friendly, whereas acquisition is always hostile.
b)
Merger may be friendly, whereas acquisition is always hostile.
c)
Merger is always dependent on synergy, whereas acquisition is never based on synergy.
d)
Merger is consensual, whereas acquisition is forced.
|
|
Ishan Choudhury answered |
- The terms mergers and acquisitions are often used interchangeably, but they differ in meaning.
- In an acquisition, one company purchases another outright.
- A merger is the combination of two firms, which subsequently form a new legal entity under the banner of one corporate name.
- A company can be objectively valued by studying comparable companies in an industry and using metrics.
Shoes and Socks Ltd. is a leading shoes and socks manufacturing company. It decided to join its operations together with Drink Up Ltd., which is an energy drink company especially for sportsmen and women. After this merger, Shoes and Socks Up would help the existing companies to extend their markets as both of these firms will share the goodwill. Identify the type of merger relationship they are in.- a)Product Extension Merger
- b)Vertical Merger
- c)Horizontal Merger
- d)Market Extension Merger
Correct answer is option 'A'. Can you explain this answer?
Shoes and Socks Ltd. is a leading shoes and socks manufacturing company. It decided to join its operations together with Drink Up Ltd., which is an energy drink company especially for sportsmen and women. After this merger, Shoes and Socks Up would help the existing companies to extend their markets as both of these firms will share the goodwill. Identify the type of merger relationship they are in.
a)
Product Extension Merger
b)
Vertical Merger
c)
Horizontal Merger
d)
Market Extension Merger
|
|
Kiran Mehta answered |
A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market. The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers.
An example of this idea was the acquisition in 2002 of the American-based Eagle Bancshares Inc by the subsidiary of Royal Bank of Canada, RBC Centura Inc.
An example of this idea was the acquisition in 2002 of the American-based Eagle Bancshares Inc by the subsidiary of Royal Bank of Canada, RBC Centura Inc.
Which of the following is the reason for mergers and acquisitions:- a)Synergy
- b)Acquiring new technology
- c)Acquiring a competency
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is the reason for mergers and acquisitions:
a)
Synergy
b)
Acquiring new technology
c)
Acquiring a competency
d)
All of the above
|
Vikas Kapoor answered |
1. Synergy: (a) It refers to the difference between the value of the combined firm and the value of the sum of the participants,
(b) Synergy accrues in the form of revenue enhancement and cost savings.
(c) For example, if firms A and B merge and the value of the combined entity—V(AB)—is expected to be greater than (VA+VB), the sum of the independent values of A and B, the combined entity is said to be benefitting through synergy.
2. Acquiring new technology: To remain competitive, companies need to constantly upgrade their technology and business applications. To upgrade technology, a company need not always acquire technology. By buying another company with unique technology, the buying company can maintain or develop a competitive edge. For example is a merger
(a) Logistics company such as a land transport entity with an air-line cargo company.
(b) Blackberry and Treo which can incorporate cell phone capability and e-mail connectivity in one device; palm pilots and tablet laptops can provide benefits to both the entities.
3. Acquiring a competency: Companies also opt for M&As to acquire a competency or capability that they do not have and which the other firm does. For example,
(a) The ICICI ITC alliance made the retailer network and depositor base available to the merging entity.
(b) IBM merged with Daksh for acquiring competencies that the latter possessed.
(b) Synergy accrues in the form of revenue enhancement and cost savings.
(c) For example, if firms A and B merge and the value of the combined entity—V(AB)—is expected to be greater than (VA+VB), the sum of the independent values of A and B, the combined entity is said to be benefitting through synergy.
2. Acquiring new technology: To remain competitive, companies need to constantly upgrade their technology and business applications. To upgrade technology, a company need not always acquire technology. By buying another company with unique technology, the buying company can maintain or develop a competitive edge. For example is a merger
(a) Logistics company such as a land transport entity with an air-line cargo company.
(b) Blackberry and Treo which can incorporate cell phone capability and e-mail connectivity in one device; palm pilots and tablet laptops can provide benefits to both the entities.
3. Acquiring a competency: Companies also opt for M&As to acquire a competency or capability that they do not have and which the other firm does. For example,
(a) The ICICI ITC alliance made the retailer network and depositor base available to the merging entity.
(b) IBM merged with Daksh for acquiring competencies that the latter possessed.
Shruti and Reema were discussing to open a restaurant of McDonalds. Reema informed Shruti that they would need the franchisee of McDonalds in order to open the restaurant. But Shruti denied and said that it is an MNC and they do not require the franchisee. In light of the above statements, state whether what Reema said is true or false. - a)True
- b)False
Correct answer is option 'A'. Can you explain this answer?
Shruti and Reema were discussing to open a restaurant of McDonalds. Reema informed Shruti that they would need the franchisee of McDonalds in order to open the restaurant. But Shruti denied and said that it is an MNC and they do not require the franchisee. In light of the above statements, state whether what Reema said is true or false.
a)
True
b)
False
|
|
Vikas Kapoor answered |
MNC franchise: It provides entrepreneurs a low-risk opportunity to co-own a business with a proven format for success. In addition, franchising provides opportunities to capture economies of scale while empowering the entrepreneur.
Sohan and Shyam are partners in a business of manufacturing biscuits. They are planning to merge with a namkeen manufacturing company in order to increase the sales and earn more profit. They decided to adopt merger as their strategy for growth. Mention which two ways are available for them to select to give way to the merger.
(i) Amalgamation
(ii) Absorption
(iii) Consolidation
(iv) Acquisition- a)(i) and (ii)
- b)(i) and (iii)
- c)(iii) and (iv)
- d)(i) and (iv)
Correct answer is option 'A'. Can you explain this answer?
Sohan and Shyam are partners in a business of manufacturing biscuits. They are planning to merge with a namkeen manufacturing company in order to increase the sales and earn more profit. They decided to adopt merger as their strategy for growth. Mention which two ways are available for them to select to give way to the merger.
(i) Amalgamation
(ii) Absorption
(iii) Consolidation
(iv) Acquisition
(i) Amalgamation
(ii) Absorption
(iii) Consolidation
(iv) Acquisition
a)
(i) and (ii)
b)
(i) and (iii)
c)
(iii) and (iv)
d)
(i) and (iv)
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Amita Das answered |
- Amalgamation: An amalgamation is a combination of two or more companies into a new entity. Amalgamation is distinct from a merger because neither company involved survives as a legal entity. Instead, a completely new entity is formed to house the combined assets and liabilities of both companies.
- Absorption: Absorption is defined as the process when one thing becomes part of another thing, or the process of something soaking, either literally or figuratively. An example of absorption is soaking up spilt milk with a paper towel. A paper towel takes up water, and water takes up carbon dioxide, by absorption.
State Whether the Following Statements are True or False.
Q. During mergers and acquisitions, the value of the combined entity is expected to be greater than the sum of the independent values of the merging firms.- a)True
- b)False
Correct answer is option 'A'. Can you explain this answer?
State Whether the Following Statements are True or False.
Q. During mergers and acquisitions, the value of the combined entity is expected to be greater than the sum of the independent values of the merging firms.
Q. During mergers and acquisitions, the value of the combined entity is expected to be greater than the sum of the independent values of the merging firms.
a)
True
b)
False
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Amita Das answered |
- Synergy is the concept that the combined value and performance of two companies will be greater than the sum of the separate individual parts.
- Synergy is a term that is most commonly used in the context of mergers and acquisitions (M&A).
State Whether the Following Statements are True or False.
Q. A merger occurring between companies in the same industry is vertical merger.- a)True
- b)False
Correct answer is option 'B'. Can you explain this answer?
State Whether the Following Statements are True or False.
Q. A merger occurring between companies in the same industry is vertical merger.
Q. A merger occurring between companies in the same industry is vertical merger.
a)
True
b)
False
|
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Priyanka Khatri answered |
Vertical Merger: A merger between two companies producing different goods or services for one specific finished product. A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge-operations.
Growth is always an essential part of a business for its existence. A business can only survive in the market and earn more profits if it grows from time to time. Rohan and Seema are planning to expand their business. They have started formulating growth strategies. Rohan has suggested a few ways to Seema which they can adopt. According to Rohan, they may expand the firm using external growth strategies. A few of them includes, Franchising, Mergers and Acquisitions. Keeping Rohan’s suggestion in mind, state whether it is true or not.- a)True
- b)False
Correct answer is option 'A'. Can you explain this answer?
Growth is always an essential part of a business for its existence. A business can only survive in the market and earn more profits if it grows from time to time. Rohan and Seema are planning to expand their business. They have started formulating growth strategies. Rohan has suggested a few ways to Seema which they can adopt. According to Rohan, they may expand the firm using external growth strategies. A few of them includes, Franchising, Mergers and Acquisitions. Keeping Rohan’s suggestion in mind, state whether it is true or not.
a)
True
b)
False
|
|
Ishan Choudhury answered |
- Franchising: A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand's trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.
- Mergers: A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The firms that agree to merge are roughly equal in terms of size, customers, and scale of operations. After a merger, shares of the new company are distributed to existing shareholders of both original businesses.
- Acquisitions: An acquisition is when one company purchases most or all of another company's shares to gain control of that company. Purchasing more than 50% of a target firm's stock and other assets allows the acquirer to make decisions about the newly acquired assets without the approval of the company's other shareholders.
Given below are the mergers with examples of each. Match them correctly.
- a)A. (i), B. (ii), C. (iii), D. (iv)
- b)A. (iii), B. (iv), C. (i), D. (ii)
- c)A. (i), B. (iii), C. (ii), D. (iv)
- d)A. (iii), B. (ii), C. (i), D. (iv)
Correct answer is option 'B'. Can you explain this answer?
Given below are the mergers with examples of each. Match them correctly.
a)
A. (i), B. (ii), C. (iii), D. (iv)
b)
A. (iii), B. (iv), C. (i), D. (ii)
c)
A. (i), B. (iii), C. (ii), D. (iv)
d)
A. (iii), B. (ii), C. (i), D. (iv)
|
|
Ishan Choudhury answered |
Correct Match:
Given below are the types of acquisitions with their meanings. Match them correctly.
- a)A. (ii), B. (iv), C. (i), D. (iii)
- b)A. (iv), B. (i), C. (ii), D. (iii)
- c)A. (ii), B. (i), C. (iv), D. (iii)
- d)A. (i), B. (iv), C. (ii), D. (iii)
Correct answer is option 'A'. Can you explain this answer?
Given below are the types of acquisitions with their meanings. Match them correctly.
a)
A. (ii), B. (iv), C. (i), D. (iii)
b)
A. (iv), B. (i), C. (ii), D. (iii)
c)
A. (ii), B. (i), C. (iv), D. (iii)
d)
A. (i), B. (iv), C. (ii), D. (iii)
|
|
Amita Das answered |
Correct Match:
Chapter doubts & questions for Enterprise Growth Strategies - Entrepreneurship CUET Preparation 2025 is part of Commerce exam preparation. The chapters have been prepared according to the Commerce exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for Commerce 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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Entrepreneurship CUET Preparation
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