Corporate Level Strategy and Global Level Strategy

Question 1

Mergers and acquisitions involve the consolidation of firms or assets to stimulate growth
and increase market share, among other factors. It is vital to acknowledge different types of
mergers and acquisitions, including consolidation, management acquisition, and asset
acquisition. Notably, there are numerous reasons why companies merge or acquire each other.
First, companies may merge for synergies, which guarantees the improved performance of
organizations (Singh, 2017). Precisely, mergers and acquisitions help combine business activities
that result in improved overall performance in the firms. Notably, synergies help reduce
overhead costs since each company leverages off of the other firm’s strengths.
Additionally, mergers and acquisitions help alleviate competition, especially as the
company that acquires another company is entitled to a larger market share. It is vital to
acknowledge that mergers help companies gain a better distribution network, which guarantees
expansion into other markets, which is a source of competitive advantage (Singh, 2017). In most
cases, mergers ensure that companies have a wider customer base, which is vital for increased
accumulation of revenue. Also, mergers and acquisitions improve companies’ economies of
scale, especially as larger companies enjoy cost savings and competitive advantages compared to
smaller firms. Mergers enable companies to produce products at affordable costs, hence the firms
can use pricing strategies to outdo their competitors.
A real example of a merger is that of Verizon and Vodafone companies. Verizon
acquired about 45 percent of Vodafone’s stake in this merger in 2014. It is vital to acknowledge
that the acquisition between Verizon and Vodafone is approximated to cost about $130 billion.
Notably, the deal was done in cash and stock, and it has given Verizon full access to the profits

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from the United States mobile operator, Vodafone. The acquisition was successful because
Verizon still exhibits excellent performance today following the deal.

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Reference

Singh, A. P. (2017). Merge or Acquire-A Strategic Framework. Annals of the University
Dunarea de Jos of Galati: Fascicle: I, Economics & Applied Informatics, 23(3).