W4 Mergersjointventures Teama-1 Essays

658 Words Dec 7th, 2014 3 Pages
Mergers and Joint Ventures
October 22, 2014
Lola Jackson

Mergers and Joint Ventures
Discuss the differences between horizontal, vertical and conglomerate mergers and how those differ from a joint venture.
Mergers are when two companies join their organizational structures and business operations together. This is done if both companies will receive more benefits from working together than they would have done by working separately. Some companies merge in order to stay in business while others retire from the industry in order not to go bankrupt.
Horizontal mergers are usually between two companies from the same industry who provide the same service or sell the same product. The business’s that merge horizontally used
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One notable example of a Conglomerate is Berkshire Hathaway. Based in Omaha, Nebraska, it started out as a textile company and later expanded in other industries. Under the guidance of great investor, Warren Buffet, Berkshire Hathaway started to expand to the insurance industry, acquiring two firms. Most notably, they own Geico Insurance (Livy, 2013). Today, Berkshire Hathaway is in many different industries in popular companies such as Wells Fargo, Coca Cola, American Express, IBM, and Dairy Queen just to name a few. In just a few decades, they went from a failing textile company, to now one of the biggest conglomerate in the world, with total assets of roughly $484 billion (Sec.gov).
A joint venture is when two or more companies perform a business project together for a set period of time. Join venture can save companies millions of dollars, by joining with other companies. When a business offers new products and services by doing joint ventures, the two businesses can grow stronger and make better decisions. This is a good way to beat other competitions in the market and increase the profits. The differences between horizontal, vertical and conglomerate; is that in joint venture (JV) each of the participants are responsible for the cost, losses, and profits. According to "Joint Venture - Jv" (2014), "Insert the quotation the “joint venture is its own entity, separate and apart from the participants' other business interests.”

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