- •Unit 9 business integration tendencies
- •How companies compete with each other
- •Vocabulary tasks
- •Competition
- •Competitive forces
- •Industries and their players
- •Mergers and acquisitions
- •Business Integration
- •Types of Business Integration
- •Forward and Backward Integration
- •Which reasons for m&As result in adding shareholder value and which do not? Fill in the table below and comment on it.
- •How to protect a company against a hostile acquisition
- •Choose the Russian equivalents for the English terms in the left-hand column.
- •Takeover Defences
- •Swot analysis
- •Round-table session
Unit 9 business integration tendencies
Learning goals After studying this unit you should be able to
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READING 1
How companies compete with each other
Before you read
Vocabulary tasks
Find appropriate explanations for a company’s activities.
When a company |
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a) starts selling in it for the first time. |
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b) tries to prevent competitors from being successful in it. |
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a market, it |
c) stops selling in it. |
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d) is the biggest competitor in it. |
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e) starts to be very successful in it. |
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f) occupies a small part of it first in preparation for gaining a larger part. |
Replace the underlined phrases below with the appropriate verbs in column 1(task 1). One of the verbs is not used.
Coffeway (CW) is a successful American chain of coffee shops. It wanted to 1) agressively enter the Chinese coffee shop market, with shops all over China. CW signed an agreement with a partner, Dragon Enterprises (DE). CW and DE decided to 2) start by opening just one coffee shop in Shanghai in order to test the market. This was very successful, so CW and DE decided to open shops all over China. It took CW and DE five years to 3) be the biggest in the market, with a 70 per cent market share among coffee shop chains in China. One of their competitors, California Coffee, tried to 4) protect its market share by cutting prices. But this strategy did not work, and California Coffee later sold its outlets to CW and DE and decided 5) to leave the market.
Key terms
Match the terms given in column A with their definitions given in column B.
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a) rivalry between businesses in the same market |
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b) factors that determine the competitive intensity and therefore attractiveness of a market |
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c) a product that is used instead of another product, that takes its place and performs its functions |
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d) sales of a company (brand or product) expressed as a percentage of total sales in a given market |
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e) an ability of a business to earn profits |
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f) a company wholly or partly owned by a parent company |
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g) putting money into something with the expectation of gain within an expected period of time |
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h) the relative ability of parties in a situation to exert influence over each other |
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i) moving into new markets or activities so as to grow, or to reduce or spread risks, often by buying other companies in different fields |
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j) the value created by a company and passed on to its customers that makes it better than its competitors (e.g. a cheaper or a better product) |
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k) the way in which a market is organised, including the concentration of suppliers or consumers, the ease of entry or barriers to entry and the competitiveness of players in the market |
Think ahead
Think about your organisation or one you would like to work for. Who are its fiercest competitors? Why are they a threat?
Text 9.1 Read the text and do the tasks in the concept check section.