(HOTS) - Enterprise Growth Strategies, Entrepreneurship, Class 12 | Additional Study Material for Commerce PDF Download

Q1. A merger between firms that are involved in totally unrelated business activities. (1 mark)

Ans. Conglomerate merger.

Q2. A merger occuring between companies in the same industry. (1 mark)
Ans. Horizontal merger.

Q3. A merger that takes place between two companies that deal in the same products but in separate markets. (1 mark)
Ans. Market extension merger.

Q4. Merger between two companies producing different goods or services for one specific finished product. (1 mark)
Ans. Vertical merger.

Value Based Question:
Q. ABC Company, manufacturing shoes, has taken over XYZ Company which also manufactures shoes at a small scale what do you think will be the reason for this kind of takeover ? (3 marks)
Ans.
(i) ABC Company may have decided to expand in terms of its production and wanted to raise its sales and turnover.
(ii) ABC Company may have decided to expand its area of sales and so may be desirous to take over the marketing area of XYZ Company.
(iii) ABC Company may have wanted to use the research and development of the XYZ company for raising its output and sales.