Let us discuss below Mergers and integrations are huge factors in the financial success that corporations and even small firms see today. The textbook defines integration as the unification of productive resources through mergers. This merger is when two or more firms unite as a single entity, which ultimately leads to larger and more powerful firms (Baye & Prince, 2017, p. 215). This is not a particularly new acquisition of business. These merges date back centuries as time has repeatedly shown that mergers are quite successful when done correctly. According to Cambridge University, studies have shown that trends of mergers had great spikes in popularity even dating back to late 1895 to 1904 (Lamoreaux, 2010, para. 1). As all avenues behind do, mergersand integrations have their own pros and cons.

Benefits of integrations include increased market share. This expansion allows the business to become a greater player in the market which makes them increase market share exponentially. On top of that, these mergers also lead to much higher rates of diversification. This allows for a broader customer market, higher revenue, and lower risk factors due to the greater spread of markets and services. Lastly, they also allow a reduction in transaction costs because technological resources are shared and the opening of new markets.

On the contrary, integrations also have their fair share of opening up harm to the business. The pushback from management is often a huge threat that their teams, positioning in the company, and uncertainty of outcomes. Another downside is the idea of "cleaning house" where many individuals must be laid off who do not fit the mold, culture, or goals to come from the merge. Along the same lines, one of the most difficult tasks from mergers is aligning company culture, goals, and employee buy-in.

Question:Looking back at history, what companies should have taken up offers of mergers and failed to capitalize on the opportunity?

References:

Baye, M. R., & Prince, J. (2017). Chapter 1: The Fundamentals of Managerial Economics. InManagerial Economics and Business Strategy(pp. 7-8). essay, McGraw-Hill Education.

Lamoreaux, N. R. (n.d.). Introduction (Chapter 1) - the great merger movement in American Business, 1895-1904. Cambridge Core. Retrieved April 12, 2023, from https://www.cambridge.org/core/books/abs/great-merger-movement-in-american-business-18951904/introduction/AC024A8812D5C62E4D103BB6DD834C87