Merging Between Two Competing Companies - 2403 Words

Question One The merging between two competing companies often results in increase in their market power. Although the merging of two top competitors and the giants in the market can raise suspicious activities, this isn’t the case in our scenario. The merging has being to the advantage of the customer who is always the top priority in the market industry. Although the merging has significantly boosted the quality of the package provided to the customer to produce a more robust package, the price of the product has remained the same at $3.00 per piece and in some instances; most of the products are being sold at a discount (Ravenscraft Scherer, 2011). There are also more options for the customers to choose from and settle for the most†¦show more content†¦They provide that such kind of merging could harm the customers by increasing our market power and eliminating the concept of free and fair trade. However, this isn’t the case with our situation as the merging of the two firms will not result in a monopoly situation that stands out to hurt the customer (Ravenscraft Scherer, 1989). On the contrary, the customers will still receive the products at the price per share and as our strategy declares, there will be maximized discounts for the customers something that our company couldn’t provide individually. On the other side, although the market power will significantly increase, our company still remains dominant in the industry compared to the other firm and this eliminates the idea of coercive monopoly. We will remain at the upper side of the deal and our firm will be in charge and dominate the market shares. Our business results over the past couple of years before the merge have revealed that we registered prominent lose in market share. We operated at almost a loss and lost a significant share of the market. However, although the concept of free trade would assume that this market shares landed in the hands of our competitors, this wasn’t the case as our competitors held the same tiny market share we did and the rest was left unexplored. The market shares were left untouched and unexplored. This condition left us disadvantaged and minimized our overall revenues. However, the merging of the