What you’ll learn to do: explain how a business can expand market share and diversify through mergers and acquisitions

So, how do businesses grow once they have been established? If you are a franchisee, you could purchase more locations and own an entire chain of franchise businesses. If, however, you are a “home-grown” business, opening additional locations or going through the start-up process again can be a real barrier to expansion. One way that businesses both small and large can expand is through the process of mergers and acquisitions.

Consider the case of a small craft-beer company that has a very popular but distinct product line. If a large brand-name beer company wants to expand and begin selling a microbrew, it can just “acquire” the brand it wants instead of starting a microbrewery from scratch (which is expensive). But what about the small craft-beer company, with its popular and distinctive product line? Do all small businesses want to merge or be acquired, even though it might mean more money and growth? The following video gives you a glimpse into one such entrepreneur and his thoughts on the topic.

LEARNING ACTIVITIES

The learning activities for this section include:

• Reading: Mergers and Acquisitions
• Self Check: Mergers and Acquisitions

Take time to review and reflect on this activity in order to improve your performance on the assessment for this section.