PowerPoint Presentation Unit 10 STAYING COMPETITIVE GETTING READY Use the following words to fill in the gaps takeover acquisition merger joint venture A occurs when two companies stop existing as ind.
Unit 10 STAYING COMPETITIVE GETTING READY Use the following words to fill in the gaps takeover merger joint venture A ………………… occurs when two companies stop existing as independent companies, combine to create a new entity acquisition merger A …………………… , or ……………………, on the other hand, is characterized by the purchase of a smaller company by a much larger one In …………………………, but the original companies continue to exist on their own The new takeover a new company is formed acquisition company is owned by the original companies joint venture DIFFERENCE BETWEEN MERGERS AND ACQUISITIONS READING COMPREHENSION NEW WORDS AND PHRASES - Controlling interest: A shareholder has controlling interest in a business when he or she owns more than 50% of the company’s voting shares, giving him or her the deciding voice in shareholder meetings and control over company direction - Balance sheet: Balance Sheet is the financial statement of a company which includes assets, liabilities, equity capital, total debt, etc at a point in time Why can Anheuser-Busch claim to be the world’s most important brewer? Because it makes Budweiser, which is the world’s biggest-selling beer How did the Belgian beer company Interbrew grow to become the world’s biggest brewer? It merged/ acquired (?) with Brazil’s AmBev, Latin America’s largest brewer merged Complete the table below ANHEUSER - BUSCH INTERBREW AMBEV Brands Budweiser, Tsingtao Strengths Beck’s, Brahma, Stella Artois Dominance of US market; products sell in 80 markets; strong World’s largest brewer by volume; global influence; balance sheet; clear lines of management; a brand with fast growth global potential Weaknesses Stuck in the US market (which is stagnant); oversea Growing too far, too fast; not get integrated previous ventures have lacked conviction; presence outside the US is acquisitions well weak; largely built its reputation on Budweiser brand Geographical influence Belgium, Brazil, (and the rest of Latin America), the US, Mexico, China Netherlands, Canada, the UK, Germany Which firm is in the strongest position to contest domination of the world beer market? Probably InterbrewAmbev because - it is not stuck in a stagnant market; - It has spread its influence over a greater number of markets globally; - it doesn’t rely on just one strong brand, but has several well-known brands CRITICAL THINKING TYPES OF COMPANY MERGERS A Horizontal Merger A merger occurring between companies in the same industry Horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry B Vertical Merger A merger between two companies producing different goods or services for one specific finished product A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one C Conglomerate A merger between firms that are involved in totally unrelated business activities There are two types of conglomerate mergers: pure and mixed Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions D Market Extension Mergers A market extension merger takes place between two companies that deal in the same products but in separate markets The main purpose of the market extension merger is to make sure that the merging companies can get access to a bigger market and that ensures a bigger client base E Product Extension Mergers A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers This ensures that they earn higher profits 1 The merger between Anheuser-Busch and Interbrew Ambev in 2008 The merger between an automobile company joining with a parts supplier The merger between a leading manufacturer of athletic shoes and a soft drink firm The merger between Eagle Bancshares Inc and the RBC Centura in 2002 Eagle Bancshares Inc held the Tucker Federal Bank, which was one of the ten biggest banks in the metropolitan Atlanta region The RBC Centura was a subsidiary of Royal Bank of Canada) The merger between America Online (AOL) and Time Warner in 2000 AOL distributed information through the internet while Time Warner supplied information through CNN and Times Magazine 6 The merger between Mobilink Telecom Inc and Broadcom in 2002 Mobilink Telecom Inc dealt in the manufacturing of product designs meant for handsets that were equipped with the Global System for Mobile Communications technology and wireless networking chips Broadcom dealt in the manufacturing Bluetooth personal area network hardware systems and chips for wireless LAN The merger between the Walt Disney Company and the American Broadcasting Company (ABC) in 1995 The Walt Disney Company was an American diversified multinational mass media corporation specializing in publishing, films, music and theme parks ABC is an American commercial broadcast television network The merger between Coca-Cola and the Pepsi beverage division The merger between Exxon Corp and Mobil Corp in 1998 They were the first and second largest oil producers in the United States 10 The merger between Glaxo Wellcome and SmithKline Beecham, two British pharmaceutical companies 21 VOCABULARY EXTENSION Slang is a type of language consisting of words and phrases that: - are considered to be very informal - are more common in speech than in writing - are typically restricted to a particular group of people or context Exercise 1: Match each slang word/phrase on the left with its meaning on the right Pointy-haired boss A A person who always agrees with superiors 1- I Brand ambassador B The main source of income for a business 2- J Hired gun C Share business details Yes man D The direction of a company who is paid a huge salary but doesn’t deserve it 3- E 4-A 5-D Fat cat E A person hired for their expertise 6-B Bread and butter F Offer a promotion in a job Seed money G The acquisition of one company but another, for the purpose of acquiring the employees more 7-H 8-G so than other aspects of the company’s business 9-C Acquire-hire H Money used to start a business Open the kimono I A boss who is not knowledgeable about technical matters 10 Call up to the majors J (In marketing) a satisfied customer who tells others about his positive experience with products of a particular brand name 10-F Exercise airhead: nothing between the ears 11 Couch potato: lazy person All-nighter: to study all night long 12 Flip out: lose control Bent out of shape: become upset 13 Get it: understand Blown away: very impressed 14 grand: thousand Booze: alcohol 15 guts: courage Bread: money 16 John: bathroom Buck: one dollar 17 Love handles: excess of fat around the waist Bummed: depressed 18 Pain in the neck: annoying Catch some Z’s: get some sleep 19 Screw up: make mistakes 10.Cool down: go back to normal 20 Another try, another chance ... Corp and Mobil Corp in 1998 They were the first and second largest oil producers in the United States 10 The merger between Glaxo Wellcome and SmithKline Beecham, two British pharmaceutical companies... about technical matters 10 Call up to the majors J (In marketing) a satisfied customer who tells others about his positive experience with products of a particular brand name 10- F Exercise airhead:... depressed 18 Pain in the neck: annoying Catch some Z’s: get some sleep 19 Screw up: make mistakes 10. Cool down: go back to normal 20 Another try, another chance