Alliances can take the following forms.
Reference
●M&A (Mergers and Acquisitions)
“M&A” is a general term for corporate “mergers and acquisitions.” A
“merger” is the formation of one corporation from multiple corporations,
while an “acquisition” is the purchase of an entire corporation or part of a
corporation.
This form of alliance also includes “absorption-type mergers” in which
one of the corporations continues while the other ceases to exist.
The objectives of M&A include entering new industries or markets, business tie-ups, corporate reorganizations, business bailouts, etc.
Abbreviation for “Mergers and Acquisitions.”
Reference
Difference between a merger,
an acquisition, and a merger
through a holding company
• Merger
Company + Company = Company
A
B
C
•Acquisition
Company + Company = Company
A
B
A
●Capital participation
“Capital participation” refers to strengthening collaboration with another
corporation by acquiring shares in that corporation and becoming a shareholder. Capital participation promotes a cooperative relationship as capital
is held by the other corporation, but it does not grant that corporation the
authority to make decisions concerning management.
●Tie-up
A “tie-up” refers to cooperation between corporations in executing business activities. Tie-ups are expanding from those confined to specific fields
such as sales tie-ups and production tie-ups (OEM production, etc.) to
those of sharing technology and cooperative recycling of waste, etc.
Forms of alliances
Form
Capital ties
Integration through a holding
company
Yes
Degree of alliance
M&A
Strong
Reference
OEM
An “OEM” is a manufacturer who makes
products which are sold under the
brand name of another corporation.
Abbreviation for “Original Equipment
Manufacturer.”
Reference
Outsourcing
Capital participation
Tie-up
Business strategy
•Integration through a holding company
Company + Company = Company Company
B
C
A
A
Company
B
Chapter 2
●Integration through a holding company
A “holding company” is a company whose purpose is to hold large quantities of shares in other stock companies and exercise control over those
companies. Some of the advantages of integration through a holding company are that it allows for business strategies that always seek profit for the
entire group, and it can also speed up decision-making processes.
M&A
“Outsourcing” refers to procuring management resources required by the corporation from external sources.
No
Weak
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