Reference no: EM132853628

Question: What constructive critiques/comments and supplemental insights do you have for the following discussion post:

Mergers and Acquisitions

Mergers and Acquisitions , or more commonly referred to as M&A, are transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated with other entities. One such example is the recent merger of telecommunication giants T Mobile and Sprint. One advantage of M&A is that it increase economies of scale. This simply means that the merged entities enjoy cost advantages due to their scale of operation, with cost per unit of output decreasing which causes scale increasing. This leads to great efficiency. On the contrary, disadvantages of Mergers and Acquisitions include an increase in the price of products and services being offered, unemployment, and cultural gaps in the entities being merged.

Joint Ventures

Joint Venture is a business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance. One such example of a joint venture is Hulu. Hulu started as a joint venture between NBC Universal, Providence Equity Partners, News Corporation and then The Walt Disney Company. Major advantages of joint ventures are that is provides easy access to new markets and distribution networks, it provides access to new knowledge and expertise, including specialized staff and it allows businesses to share risks and costs. Disadvantages of joint ventures include the fact that leadership and support is not present in the early stages, work and resources are not distributed equally and that the respective partners expect different things from the joint venture.

Licensing/Franchising

Licensing or Franchising is a business arrangement in which one company gives another company permission to manufacture its product for a specified payment. There are several advantages for licensing/franchising, these include the fact that it creates new business opportunity, it creates an easier entry into foreign markets and it creates self. One disadvantage of licensing/franchising is that the firm is more than likely to lose control over its products/services including promotion, packaging and selling.

Strategic Allegiances

A strategic alliance is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. As such, advantages of Strategic allegiance are that strategic partners may provide goods & services that complement your own and it reduces overall costs and risks. Contrarily, disadvantage include the fact that strategic alliances may cause potential competitor and that it trade secrets are being shared between companies.