Question

Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions?a. to facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy. b. to gain quick access to new technologies or other resources and capabilities. c. to extend a company's business into new product categories.d. to create a more cost-efficient operation out of the combined companies
e. to expand a company's geographic coverage

Answer 1

Answer:

The correct answer in this case is option a. or to facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy.

Explanation:

Some of the major attributes or objectives behind commercial mergers and acquisitions commonly include expansion of market share or customer base through tapping into new markets(both geographically and new product based) and adopting product or service differentiation by combining business operations,invent more cost effective production processes or methods and gain access to new and improved technological resources and inputs.Hence,one of the important objectives of any commercial merger or acquisition is actually to enhance market share of the company or business organisation through diversified product differentiation and not on any focused differentiation strategy which can potentially cover a relatively wider consumer base.