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A Merger analysis of Carrefour and Tesco.

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Introduction

Business Studies Coursework A Merger analysis of Carrefour and Tesco Introduction I have decided using my knowledge of trade across different countries to propose and a merger for this piece of coursework. This merger was an idea of mine as I thought Britain's largest supermarket operator should merge with France's largest supermarket operator. Neither one nor the other company has particularly large market shares in the market in Britain for Carrefour, and France for Tesco, although each company has stores currently operating in those countries. This is why I have decided to investigate a merger between these two large companies, to discover if this external economy of scale is too large to increase profits, too large that they may have a monopoly over the Anglo European market or whether the arguments between managerial decisions and the amount of corporate downsizing will be too difficult to maintain a secure and steady working atmosphere. Why Tesco? Tesco has the largest market share in the UK, with a 27% share of the market, although regarded by the competition committee to be verging on the edge of a monopoly it is a highly successful business. ...read more.

Middle

However this large chain has little impact on the UK market and if it did then it could drive competition away. It has not yet established itself as a successful multinational company and could provide with this merger a larger amount of competition on a global scale against companies like Wal Mart. The Aim To create a successful merger, which will not affect the public in a bad way and will increase competition on a global scale, bringing all prices of many supermarkets down Why Merge? This Anglo-European merger will affect not only the market dominance in their own countries but also in the entire world. This will heavily affect the global market dominance of Wal mart the world's biggest supermarket chain. The merger will create new opportunities for the quaternary industries in creating greater capital for research and development of new products. This means that these new products are retailed in the stores, and the public will have a more diverse range of products to select. ...read more.

Conclusion

This will be highly ineffective as a business and the merger will be seen as a failure unless something is done about it. Another problem may be the corporate downsizing, which may take place (although unlikely due to the branches having a span across two countries so there would be little need to close down already running branches and therefore people can keep their jobs) due to a lot more retained profits every year, which means that they will not need so many employees as Tefour will be one large company, so people who work in the offices and some of the managers may be made redundant, as there is no use for two managers who do the same thing. Another problem will be the arguments over managerial positions, which could mean a decrease in staff motivation, which again is not a good thing but does not greatly affect the company's success anyway. Also both the managers may have different managerial styles, which would lead to some of the staff leaving because they do not agree with some decisions. ...read more.

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