A safe way to help companies stay competitive is through mergers and acquisitions. Each has their own benefit but the most ideal understanding is to trim down the competitors that are in the same category or industry. For sure, money will be a potential factor. Buying out a competitor is no easy undertaking and usually the process takes some time to be able to consummate.
In most cases, mergers and acquisitions help companies combine and take on the remaining competitors, each laying down their current and potential strategies so that they can be consummated and achieved. This not only helps them write off debts and probably losses incurred coming from receivables or mismanagement of funds, but either way, it allows the merging corporations start anew and prepare for a better outlook for the benefit of both parties.
However, downsizing of labor force may be a necessity. For sure, there will be duplicate positions coming from both companies. Standard practice is that the major company will hold the right to choose, but again, there are cases where in potential personnel on the other company will be of use towards the combined outlook. Some look at mergers and acquisitions in a negative way, probably because it looks like one of the companies is loosing money to sustain its operations, but from afar, such strategies are really more on being realistic and sustain efficiency, since trimming down the competitors today will be for the benefit of the more vision conscious teams of tomorrow.
Originally posted on June 21, 2006 @ 8:49 am