Research Paper on:
Mergers and What Motivates Them

Unformatted Sample Text from the Research Paper:
need for competitors in the marketplace to develop a competitive advantage. It has been in pursuit of this that many companies have followed a policy of acquisition and merger, even  if it is an apparently emergent strategy. There are different types of competitive advantage, the two most recognised centre around the two differentiations made by Porter. These are  cost advantage or advantages by way of differentiation (Thompson, 1998). In a market place that is increasing in competition the search for this advantage requires investment. The advantage of cost  does not mean being able to sell the goods at a lower price than competitors, but being able to produce the goods at a lower price and therefore have a  higher profit margin (Thompson, 1998). This can be seen as an advantage of economies of scale resulting in marginal costs being reduced, though the utilisation of comparative advantage or  through economies of scope (Thompson, 1998). However, it is wrong to assume that big is always best, as economies of scale can be negative at certain levels in some  industries, leading to diseconomies of scale (Thompson, 1998). Therefore a strategy of mergers may not always be the best strategy for every company.  It can be argued it is due to the search for cost advantage by way of economies of scale and scope as well as market share that lead many  companies to peruse a company policy of mergers or acquisitions as well as attempting to behaviour in the expected manner in response to the normal business models or organisational behaviour.  If we consider the search for an advantage by way of differentiation merger and acquisition can also be seen as a strategic tool. The mergers or acquisitions may bring resources,