Assignment:
Strategy - Horizontal and Vertical Integration
Mergers and acquisitions are ways in which firms can generate growth measured by expectations of higher profits and linked to higher profits is expected higher stock values. Growth in profits in mergers and acquisitions arise through gains: in economies of scale; gains in economies of scope; and, sometime by gains in both economies of scale and scope.
What is the difference between an economy of scale and an economy of scope?
The video features four recent but very different mergers/acquisitions. Use one of these and explain: was the merger/acquisition predominately about gaining economies of scale or economies scope?
OR
Identify a recent merger/acquisition and use it to and explain: was the merger/acquisition predominately about gaining economies of scale or economies scope?
Discussion question
Porter\'s Five Force and The Economic Models of Market Structure
Identify a firm which operates in monopolistic competitive environment and a firm which operates in an oligopoly environment. Explain how you concluded the firm was monopolistic competitive or an oligopoly.
Apply Porter's five forces to explain:
1) What are the challenges to profits faced by each firm?
2) Which firm is likely to have a much higher rate of return?
3) What challenges to profits arise due to supply chain and intermediary consumers such as processor and distributors.
Be sure to cite all source used.