Sample Business Term Paper on Company expansion

Company expansion

As part of consistent running and improvement to expand and make profits, companies often change their market, production and sales strategies with time. In this case when Free Range contracts with a large French food processing company(A), the process best fitting is franchise(6). This is because the large French company (franchisee) will be given rights by the Free Range (franchisor) to transact its business while it remains independent. Notably, it does not mean that Free Range has been acquired by the large French company in this case. It is worth noting that Free Range still has control over its operations even after giving the rights to the big French company.

            Contrary to the above, in the scenario where Free Range buys an established French firm (la fromage petite) (D), the process qualifies to be referred to as merger of two independent companies into one (1). This means that now Free Range has all the rights to run the operations of La Fromage Petite in their own desire and style. Moreover, it now means these two companies have become one entity and operations will be channeled from one command line (Greenberg, 1997). Mostly, these mergers are influenced by the urge of companies to grow bigger in terms of production and also to cut cost of production and labor force.

            In the situation where Free Range and Danon agree to build a new cottage cheese processing facility(c), it is noted they are trying to have a joint venture(3) to achieve mutual expansion and profit making. They have both agreed to develop a new entity where they will be sharing resources like personnel, capital and others for mutual benefit at the end. This will help the two companies have access to expertise they may not have or may not be willing to invest in. The two companies will have an upper hand in case they want to enter a business with less financial commitment.

            Strategic alliance (5) in this context is eminent where Free Range and La Fromage Petite agree to develop, and sell each other’s product-lines in the U.S.A and France respectively (E). This is the agreement reached by these two companies so that each can benefit from the strength of the other. This is catalyzed because they both share expertise and knowledge as well as reduction of cost and development of technology. Mostly these kinds of alliances are successful since they are voluntary arrangements between firms involving exchange sharing and other services. Unlike mergers, these companies will remain independent and will not completely merge together as one.

            By choosing to export its current product line to France for marketing and sales (7), Free Range is basically outsourcing (F) to mutually benefit from this (Lacity, 1994). This as the name suggests primarily involves contracting out business processes to another party. It can be interpreted as a way of seeking help from quotas who know more than the party doing the outsourcing. The main notable advantage is cost reduction and improving quality. This is because organizations have to keep reorganizing production lines to avoid producing low quality products or services.

            Lastly, by Free Range, Danon, Breakstone and Maplehurst  agreeing to build a new cottage(B), this is referred to as cooption(2) in the sense that the companies have been brought together by a common platform. It is from this platform that they agree to take on in a specific direction as team players driven by a common goal to achieve prosperity. Similar to outsourcing, in cooption the companies/organization remain mutually independent to each other.

References

Lacity, M. C., Hirschheim, R., & Willcocks, L. (1994). “Realizing Outsourcing Expectations: Incredible Expectations, Credible Outcomes”. Journal of Information Systems Management,

Greenberg, E. R. & Canzoneri, C. (1997). Outsourcing: The AMA Survey. American Management Association, New York.