The Dubious Logic of Global Megamergers
Because of the changing of the organization of the world, the oil industry starts to globalization as the other sectors. Also it provides acquisition for companies. According to Pankaj Ghemawat and Fariborz Ghadar “empirical research indicates that global or globalizing industries have actually been marked by steady decreases in concentration since World War II” When we focus on the relationship between globalization and concentration, first we meet the comparative advantage. Development of the technology, companies compete the more and more than before with their competitors. Then, if we focus on concentration can destroy value “to profit from dominating in a concentrating industry, a company needs to extract value by pushing certain economic levers.” Besides, there are more profitable strategies against for globalization. Pick up the scrap: Generally, there may be growth opportunities for spin-offs, divestments or assets sales that can give companies. Stay Home: “For many companies, it still makes a lot more sense to grow domestically or regionally than to try and establish a global presence.” Keep your eye on the Ball: It focuses on the development of competitive advantage via benefit from the occupation of the competitors. Make friends: If defined as the megadeal is to build scale through relationships. Appeal to the Referee: If you suffer from the competitors, and you have not the power, you can put a spanner in the works. Sell out: Where the big deal makes sense, if there are seller rather than the buyer. It can provide opportunity for your company.
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