Unit 10 staying competitive (1)

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 acquisition merger joint venture

1. A ……… occurs when two companies stop existing as independent companies, combine to create a new

entity

2. A ……… , or ………, on the other hand, is characterized by the purchase of a smaller

company by a much larger one

3. In ………, a new company is formed but the original companies continue to exist on their own The new

company is owned by the original companies

merger

joint venture

DIFFERENCE BETWEEN MERGERS AND ACQUISITIONS

1 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.

2 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

3 Complete the table below

ANHEUSER - BUSCH INTERBREW AMBEV

Brands

Strengths

Weaknesses

Geographical influence

Budweiser, Tsingtao Beck’s, Brahma, Stella Artois

Dominance of US market; products sell in 80 markets; strong balance sheet; clear lines of management; a brand with global potential

World’s largest brewer by volume; global influence; fast growth

Stuck in the US market (which is stagnant); oversea ventures have lacked conviction; presence outside the US is weak; largely built its reputation on Budweiser brand

Growing too far, too fast; not get integrated previous acquisitions well

US, Mexico, China Belgium, Brazil, (and the rest of Latin America), the

Netherlands, Canada, the UK, Germany

4 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

2 The merger between an automobile company joining with a parts supplier

3 The merger between a leading manufacturer of athletic shoes and a soft drink firm

4 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)

5 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.

7 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.

8 The merger between Coca-Cola and the Pepsi beverage division

9 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.

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

1 Pointy-haired boss A A person who always agrees with superiors

2 Brand ambassador B The main source of income for a business

3 Hired gun C Share business details

4 Yes man D The direction of a company who is paid a huge salary but doesn’t deserve it

5 Fat cat E A person hired for their expertise

6 Bread and butter F Offer a promotion in a job

7 Seed money G The acquisition of one company but another, for the purpose of acquiring the employees more

so than other aspects of the company’s business

8 Acquire-hire H Money used to start a business

9 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

Exercise 2

1. airhead: nothing between the ears

2. All-nighter: to study all night long

3. Bent out of shape: become upset

4. Blown away: very impressed

5. Booze: alcohol

6. Bread: money

7. Buck: one dollar

8. Bummed: depressed

9. Catch some Z’s: get some sleep

10.Cool down: go back to normal

11 Couch potato: lazy person

12 Flip out: lose control

13 Get it: understand

14 grand: thousand

15 guts: courage

16 John: bathroom

17 Love handles: excess of fat around the waist

18 Pain in the neck: annoying

19 Screw up: make mistakes

20 Another try, another chance