University of Phoenix
Finance for Business
December 14, 2011
Integrative Problems and Virtual Organization
Lafleur Trading Company is a private company that has supplied the world with the finest food and wines over 3 dozen trading partners across the planet. Recently, they have decided to expand their operations. Looking at their options, they may expand by acquiring another organization in the same industry, go public through an IPO, or merge with another organization. Below are the pros and cons that may come with each approach. One advantage of being a privately held company is the ability to move quickly without having to obtain approval of shareholders or a board of directors. The owners of a privately held company have a greater interest in the success of the business because of the greater risk the owners face. It would be easier and faster to acquire a company in the same industry. The company would obtain a new customer base and potentially be obtaining new technology that would improve overall operational effectiveness. When an organization decides to expand their business by acquiring another organization in the same industry, there are a few things that need to be considered. An acquisition can be defined as the purchase of one business or company by another company or business entity. One of the strengths of acquiring another company is the fact that they have so many trading partners across a wide range. Lafleur Trading Company only deals with reputable producers and exporters which shows that they are more than capable of handling more responsibility. Their extensive list of products includes seafood, wine, fruit, vegetables, cheese and maple products. If a friendly acquisition occurs, both companies would work together and negotiate the arrangements. Learning more efficient ways for production can...