Business expansion or expansion required by a company to achieve efficiency, become more competitive, as well as to increase profits or profit of the company. Business expansion can be done in several methods, namely:
1. Merger Or Merger
The merger is a merger of two or more companies into one unified entity. The company is dominant compared with other companies that will retain its identity, while the weak will obscure the identity they have. the types of mergers:
a. Vertical Mergers
The company is still in one industry but different levels or operational level. Example: Fast food restaurants joined the company’s chicken farms.
b. Horizontal Merger
The company bought the company in one industry at the same level of operation. Example: the computer manufacturer to join the computer manufacturer.
c. Conglomerate mergers
There are no industrial relations at the company being acquired. Aiming to improve the firm’s profit from various sources or business units. Example: alternative medicine companies join the wireless cellular phone operator.
2. Acquisition
The acquisition was the purchase of a company by another company or by a group of investors. Acquisitions are often used to maintain the availability of supply of raw materials or product warranties will be absorbed by the market. Examples: Aqua acquired by Danone, Pizza Hut by Coca-Cola, and others.
3. Hostile Take Over or takeover In Force
Hostile take-over is an act of acquisitions made by force is usually done by opening the bidding up shares of companies that want to master in the capital market at a price above market price. Takeover by force is usually followed by the sacking of employees and managers to be replaced new people to perform at the company’s operational efficiency.
4. Leverage Buyout
Leverage buy out the company with the procurement of engineering methods used loans or debt management to buy other companies. Sometimes a target company can be owned without a large initial capital.