Which merger strategy is most difficult to maintain?

Expert Solution

Hi

Mergers happen when two companies agree to go forward as a single new company.Mergers basically help companies to expand their business.

So now about the strategies, most common types of mergers are Horizontal merger, Verical merger, market extension merger and Conglomeration.

In my opinon, i would say Horizontal merger is the most difficult to maintain for a long period of time.In horizontal mergers, companies who are in same market and offer same products merges and form a new company.This leads to employees of two different organizations come under one roof to work together but it gets difficult to integrate the culture, employee behavior of two different organization.Another problem with this strategy is that it leads to lack of product diversification which is a very risky proposition because then one single product can affect the profitablity of the entire company. Apart from this, merger in the same industry can help new entrants of the market to grow which will lead to decrease in market share of the company.

jeff jeffy answered 1 year ago

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