BPS Chap 7 - Chapter 7 HW 1,2,3,4,5 1 Why are merger and...

Chapter 7 HW: 1,2,3,4,5
1. Why are merger and acquisition strategies popular in many firms competing in the global economy?
Merger and acquisition strategies are popular in firms for many reasons. They can play a central role in the
restructuring of businesses, meaning that there is a potential for growth. M&A strategies are also used to
improve a firm's ability to create value for all stakeholders, including shareholders. M&A strategy can also be
used because of uncertainty in the competitive landscape, increase market power because of competitive threat,
spread risk due to uncertain environment, and shift core business into different markets. The main intent is to
increase a firm’s strategic competitiveness and value.
2. What reasons account for firms’ decisions to use acquisition strategies as a means to achieving strategic
competitiveness?
There are several reasons that account for firms' decisions to use acquisition strategies as a means to achieving
strategic competitiveness. Reasons are:
1. Increased market power
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