Kudler Fine Foods: A Comparison Essay

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They may feel animosity because of the acquisition and are just going along until they can find a job somewhere else. While acquisitions can be a good thing, companies must understand that there is a strong possibility that there might be a high employee turnover rate within the first year or so of the acquisition. It is extremely important that any sensitive issues that may arise are handled openly, honestly and in an efficient manner.

Merger Strengths

By merging with another company, Kudler Fine Foods could gain knowledgeable employees, and potential alternate locations/buildings in addition to an influx of capital necessary to quickly expand the business and the opportunity to re-invent itself into a new business. More potential advantages of mergers and acquisitions include achieving economies of scale, combining complementary resources, eliminating inefficiencies, and receiving tax advantages. Other reasons for consider this type of growth include obtaining property rights as stated above to products and services in addition to building and employees. By merging or acquiring another company Kudler Fine Foods has the potential to increase market power by purchasing competitors, shoring up weaknesses in key business areas, penetrating new geographic regions, or providing manager with a new opportunity for career growth and advancement.

Merger Weaknesses

Similar to the acquisition, the merger may have some pitfalls. It definitely has many strengths, but companies must know that not only are they in business to provide a service or services that the customer wants, but that it must also invest in its employees and place value on them. A merger can mean the duplication of several different positions within the new company and this can mean that some will be laid off because of the duplication.

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A merger can also be a setup for failure if the companies merging haven't ironed out how operations will be run in the short- and long-term.

Conclusion

Kudler is in a prime position for expansion. It started with one store in 1998 and grew to three stores in less than five years. This shows that the company has potential for tremendous growth. Even though Kudler is in a prime position for expansion, it should examine the options before it carefully. Each option that the company has: IPO, acquisition and a merger have pros and cons. The company has to carefully consider which option is best for it and move forward with the notion that nothing is guaranteed. However, this should not stop them from moving forward with the expansion. There will always be risks with these types of business ventures, but many times the rewards far outweigh the risks......

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