Merger and Acquisition Strategies

question 52

Multiple Choice

Merger and acquisition strategies

• A)are never prone to mistakes,such as deciding which activities to leave alone and which activities to meld into their own operations and systems.
• B)may offer considerable cost-saving opportunities and can be beneficial in helping a company try to invent a new industry and lead the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities.
• C)are a particularly effective way of pursuing blue ocean and outsourcing strategies.
• D)seldom are a superior strategic alternative to forming alliances or partnerships with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition.
• E)are one of the best ways to help a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position.

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Definitions:

Recognizes Revenue

The process of recording revenue in the financial statements when it is earned and realizable, following the accrual accounting principle.

Total Assets

The sum of all resources owned by a company, measured in terms of monetary value, as listed on the balance sheet.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct costs of producing goods or services.

Cash Basis

An accounting method where revenue and expenses are recognized when cash is received or paid, rather than when earned or incurred.