Business organisation and policy Essay Example | Topics and Well Written Essays - 2250 words

backing organisation and policy - Essay Example............................................. 6 5. Discussion of Merger Seeking...................................................................... 7 6. Conclusion..................................................................................................... 9 References / Bibliography agate by-line organisation and policy 1. Introduction Many communication channeles attempt to modify their revenue stream or fight a higher competitive advantage through the process of acquiring or merging with other successful companies. Corporations believe that they can gain a considerable exploitation potential, improve overall usefulness delivery or produce better and more innovative products by consolidating talents that exist within the business being acquired and amidst the new business entity acquired. However, many board members and executives at these companies do not fully substantiate the realities of what affects successful acquisition and merger philosophy, with most of these driven by the external food market and external stakeholders. In order to understand what causes failures in merging and acquiring other firms, it is necessary to explore real-life case histories of ii different companies with radically different success and failure outcomes after merger. airwave France merged with KLM and found a considerable growth potential and synergy development, whilst Daimler-Chrysler suffered substantial loss of business competitiveness and capital growth after the merger. It is likely that board members and executives, despite such a high margin of failed mergers and acquisitions, continue to desire out these opportunities for a variety of financially-based rationales, for the potential benefits achieved with shareholders and stakeholders, and as a generalised strategic methodology to improve efficiency, productivity, and cultural development. This report examines the two merged company case studies and comes to a determination as to why businesses continue to seek merger and acquisition opportunities despite numerous failures in this process. 2. The case of Air France and KLM Air France and KLM were both highly successful airline carriers that found independent revenue growth in their hearthstone markets of France and the Netherlands respectively. Both airlines agreed that a merger would improve their competitive position in the airline marketplace and could develop long-lasting synergies that would ultimately lead to sales growth and cost reduction in identify divisions of operations. The Air France and KLM merger should be considered a significant success in merger philosophy. Why is this? In key markets, Ryanair and other little cost carriers were beginning to expand their fleets by using lean models of operations that allowed for cost reduction to be passed on to consumers in the price of lower fares. This was impacting the profitability bottom line of both major carrie rs which had higher overhead cost and administrative costs associated with labour payments to maintain their unspecific hub networks. These low cost carriers were using dynamic pricing and were able to reduce marketing and advertising costs thus, it was becoming more attractive to multiple target market consumers (Malighetti, Paleari and Redondi, 2009). Because of regulatory restrictions, Air France and KLM, separately and in their host countries and markets, could not adjust their costs of operations to successfully compete with Ryanair and other growing low cost carriers using penetration or dynamic pricing models. Together, however, it gave