Very Short Type Questions - Enterprise Growth Strategies, Entrepreneurship, Class 12 | Additional Study Material for Commerce PDF Download

Q1. What is merger ? (2 marks)
Ans. A merger is a combination of two companies into one larger company. All the combining companies are dissolved and only the new entity continues to operate.

Q2. What is acquisition ? (TBQ) (2 marks)
Ans. Acquisition means a company buying most, if not all, of the target company’s ownership stakes in order to assume control of the target firm.

Q3. What is merger of the firms involved in totally unrelated business activities called ? (1 mark)
Ans. Conglomerate merger.

Q4. What is horizontal merger ? (1 mark)
Ans. A merger occuring between companies in the same industry are considered as horizontal merger.

Q5. Define vertical merger ? (1 mark)
Ans. A merger between two companies producing different goods or services for one specific finished product.

Q6. Between whom does market extension merger takes place ?(1 mark)
Ans. Market extension merger takes place between two companies that deal in same products but in different markets.

Q7. Define product extension merger. (2 marks)
Ans. A product extension merger takes place between two business organizations that deal in products which are related to each other and operate in a same market.

Q8. Give an example of product extension merger. (1 mark)
Ans. The acquisition of Mobilink Telecom Inc. by Broadcom is an example of product extension merger.

Q9. Name the types of conglomerate merger ? (1 mark)
Ans.
(i) Pure,
(ii) Mixed.

Q10. Differentiate between pure conglomerate merger and mixed conglomerate merger. (2 marks)
Ans. Pure conglomerate merger involves firms with nothing in common, while mixed conglomerate merger involves firms that are looking for product or market extension.

Q11. Give an example of conglomerate merger. (1 mark)
Ans. Merger between Walt Disney Company and the American Broadcasting Company.

Q12. Give an example of horizontal merger. (1 mark)
Ans. A merger between Coca-cola and Pepsi beverage division, for example, would be horizontal merger in nature.

Q13. What is the main goal of market extension merger ? (1 mark)
Ans. The main goal of market extension merger is to make sure that the merging companies can get access to bigger market and that ensures bigger client base.

Q14. Name the two forms of merger ? (1 mark)
Ans.
(i) Amalgamation,
(ii) Absorption.

Q15. What is called the stage of consolidation ? (1 mark)
Ans. Stage of consolidation is the stage which is normally 3-5 years after the take off stage.

Q16. Differentiate between consolidation and merger. (TBQ) (1 mark)
Ans. Consolidation means combination involving firms that are of similar size. Merger is when two firms differ significantly in size.