Question
Big Insurance Company is a large supplier of health care services which is under fire from the government to lower costs and increase efficiency. Big
Big Insurance Company is a large supplier of health care services which is under fire from the government to lower costs and increase efficiency. Big Insurance has an excellent reputation and is widely acknowledged as one of the best-managed companies in the country. In spite of its reputation, however, Wall Street has reacted negatively to government efforts to reform the industry as a whole, and Big Insurance's stock price has lost 30% of its value in the last year. To counter the effect of possible government intervention, Big Insurance has just purchased Little Company, a discount health care supplier and traditionally one of Big Insurance's feistiest competitors. Wall Street has greeted the acquisition with enthusiasm and Big Insurance's stock price has rebounded by more than 10% since news of the acquisition was made public. While this acquisition could provide Big Insurance with a foothold in tomorrow's health care industry, a real problem lies in the mission of Little Company. Little has made its reputation by providing objective health care advice to its customers. Now that it's owned by Big Insurance, customers have expressed doubts about how objective Little can be in recommending health care services if it's owned by a health care provider.
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