Strategic Alliance / Partnership: SA is a kind of partnership between two entities in which they take advantage of each others core

strengths like proprietary processes, intellectual capital, research, market penetration, manufacturing and/or distribution capabilities etc. They share their core strengths & always seek to gain knowledge in the areas in which they are deficient. Strategic alliances are collaborative arrangements where two or more companies join force to achieve mutually beneficial strategic outcomes. Alliances can be contractual No ownership / separate identity

Studies indicates that large companies are commonly involved in 30 to 50 alliances Examples: It is must & most common in PC industry because different components of PC & software supplied by so many different companies from different countries. Toyota is having a long term strategic partnership with many of suppliers of automotive parts & components to lower the cost and to improve quality of vehicles. Apple and AT & T in production and launching of I phone.

Merger / Amalgamation: A merger refers to the process whereby at least two (or more) companies combine to form one single company. Its a Combination and pooling of equals, with newly created firm often taking on a new name. Ownership ties more permanent than partnership ties. Examples: Brookebond & Lipton = Brookebond lipton India Ltd ICICI bank & Bank of Mathura = ICICI Bank Hindustan vanaspati mfg company + Liver brothers india ltd + United traders ltd = Hindustan Liver Limited

Types of Merger:
Horizontal Merger Horizontal Merger refers to the merger of two companies who are direct competitors of one another. They serve the same market and sell the same product. Horizontal mergers are designed to produce substantial economies of scale and result in decrease in the number of competitors in the industry. The merger of Tata Oil Mills Ltd. with the Hindustan lever Ltd. was a horizontal merger. ICICI + Bank of Mathura Vertical Merger Vertical merger is effected either between a company and a customer or between a company and a supplier. It is a merger which takes place upon the combination of two companies which are operating in the same industry but at different stages of production or distribution system. If a company takes over its supplier/producers of raw material, then it may result in backward integration of its activities. On the other hand, Forward integration may result if a company decides to take over the retailer or Customer Company. Disney + Pixar Conglomeration Merger Conglomeration refers to the merger of companies, which do not either sell any related products or cater to any related markets. Here, the two companies entering the merger process do not possess any common business ties. These mergers involve firms engaged in unrelated type of business activities i.e. the business of two companies are not related to each other horizontally ( in the sense of producing the same or competing products), nor vertically( in the sense of standing towards each other n the relationship of buyer and supplier or potential buyer and supplier). L & T and Voltas Co generic Merger (Includes two types) Product-Extension Merger is executed among companies, which sell different products of a related category. They also seek to serve a common market. This type of merger enables the new company to go in for a pooling in of their products so as to serve a common market, which was earlier fragmented among them.

When a new product line allied to or complimentary to an existing product line is added to existing product line through merger, it defined as product extension merger, Market-Extension Merger occurs between two companies that sell identical products in different markets. It basically expands the market base of the product. Similarly market extension merger help to add a new market either through same line of business or adding an allied field. Both these types bear some common elements of horizontal, vertical and conglomerate merger. Amalgamation vs. Merger Merger is fusion of two or more entities and it is a process in which the identity of one or more entities is lost (as is often seen when political parties merge). Amalgamation is blending together of two or more business entities in a fashion that both lose their identities and a new separate entity is born. In the case of a merger, the assets and liabilities of a company get vested into the assets and liabilities of another company. The shareholders of the company being merged become shareholders of the larger company (as when two or more smaller banks merge with a larger bank). On the other hand, in the case of amalgamation, shareholders of both (or more) companies get new shares allotted that are of a new company altogether.

Acquisition / Takeover: One firm, the acquirer, purchases and absorbs operations of another, the acquired. When one company takes over another & clearly established itself as a new owner. Examples: Reliance + IPCL Vodafone + Hutch Brookebond + Kothari general foods Tata + Coras

Joint Venture: A joint venture is a legal partnership between two (or more) companies where in them both make a new (third) entity for competitive advantage. With a JV you will have something more than simple governance; you'll have a completely new entity with a board, officers, and an executive team. Effectively a JV is a completely new organization, but owned by the founding participants. The board of directors generally is constructed with representatives of the founding organizations. This new company will "do business" with the founding entities-usually as suppliers.

Examples: Suzuki Motor corp. + Maruti udyog Ltd =Maruti Suzuki Unitech (India) + Telenor (France) = Uninor