Company LOGO Chapter 3 section 2 Business Growth

Company LOGO Chapter 3, section 2 Business Growth and Expansion Pages 64 -67

Mergers Activity A. Every student should have an INDEX CARD. Each index card names a company. B. Find other students with whom to merge your company. C. As a GROUP, answer the questions below and turn them in for credit (include name): 1. What companies were part of the merger? 2. Why would your companies choose to merge? 3. Explain whether your merger is a horizontal or vertical merger.

HOW AND WHY BUSINESSES MERGE Reasons for Merging Efficiency IDENTITY Gain/Lose Eliminate Competition

BUSINESS COMBINATIONS 1. Horizontal Merger 2. Vertical Merger 3. Conglomerate 4. Multinational

HORIZONTAL MERGER 2 or more companies in the same business come together Example 1 Nike and Adidas Example 2 Sprint and Nextel

VERTICAL MERGER Firms involved in different steps of the manufacturing process come together Example 1 Example 2 Ford Truck Co. buys a tire company and an engine parts supplier Coca-Cola buys A sugar farm And a trucking Company to deliver its soda

CONGLOMERATE FIRM THAT HAS AT LEAST 4 DIFFERENT BUSINESSES MAKING UNRELATED PRODUCTS, NONE OF WHICH IS RESPONSIBLE FOR A MAJORITY OF ITS PROFITS Example 1 Example 2 Honda Cars, motors, boats, power products Yamaha Musical instruments, motor cycles, home theater, vehicles

MULTINATIONAL Definition: corporation with operations in more than one country, moving goods and services around the world Strengths: Spread technology; generating new jobs; provide tax money to host country Weaknesses: unfair influence on politics of the host country; Exploitation of low wage workers; exporting scarce natural resources (like oil); interfering with development of local businesses

MERGERS 1. Pizza Hut, Domino’s & Vocelli Pizza (H) 2. Pepsi & Coke (H) 3. Herr’s Chips & Lay’s Chip’s & Snyder’s Pretzels (H) 4. 5. 6. 7. Cricket & Verizon & AT&T (H) HGTV & Food Network & Travel Channel (H) Traveler Mag & Bargain Vacations Mag (H) Exxon. Mobil & Shell Oil & Imperial Oil (H) 8. General Motors & Goodyear & Guardian Glass (V) 9. Bob’s Farm & Judy’s Grocery & Boo’s Restaurant 10. Crombie’s Coffee Beans & Moo Dairy Farm & Sweet Cookies Bakery & Coconuts Coffee and Ice Cream Parlor V)