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FIN 370 Week 5 Team Assignment - Virtual Organization Strategy Paper - Berrys Bug Blasters Presentat

FIN 370 Week 5 Team Assignment - Virtual Organization Strategy Paper - Berrys Bug Blasters Presentat

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Unformatted text preview: Berry’s Bug Blasters Berry’s Bug Blasters Expansion Strategy Options for Growth Options for Growth Taking the organization public Acquisition Merger Initial Public Offering – Initial Public Offering – Definition Company issues common stock to the public Ownership would be transferred to stockholders in exchange for growth capital Initial Public Offering – Initial Public Offering – Benefits Less expensive access to capital funds Increased public exposure More attractive to employees and investors Increased finance opportunity Initial Public Offering ­ Risks Initial Public Offering ­ Risks Sharing financial information Unpredictability of stocks Uncertainty of future stock value Acquisition ­ Definition Acquisition ­ Definition “When one company takes over another and clearly established itself as the new owner” Two companies together are more valuable than two separate companies Acquisition ­ Benefits Acquisition ­ Benefits Quickly achieve the company’s goal of expansion Barry’s obtains all assets of the purchased entity Barry’s may also benefit through the addition of new services Acquisition – Risks Acquisition – Risks Finding a similar organization meeting the requirements available Potential associated cost The state of the organization to be acquired Time and employee resistance Merger – Definition Merger – Definition Pool resources Exchange ideas Grow as one brand Allows two organizations to: Merger ­ Benefits Merger ­ Benefits Less expensive and more cost effective than other growth options Increased sales opportunities Qualify for bulk pricing Shared business tools Merger ­ Risks Merger ­ Risks Loss of brand identity Lack of communication Possible rumors and negativity Growth Suggestion Growth Suggestion The best option would be a merger with another company Allows expansion with less expense IPO would reveal unfavorable information Acquisition is lengthy/costly References References Investopedia (2009). Mergers and Acquisitions. Retrieved November 11, 2009, from http://www.investopedia.com/university/mergers/ Malott, T. G. (2001). Building value through strategic acquisitions. San Diego Business Journal, 22(49), 20. Pickering, M. (2007, March). The urge to merge. In the 68­69. Black, 77(2), ...
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