For now maybe he represented a strategic advantage. Now Luis thought of a possible agreement, merger or meeting. Among the sources of business synergy liable they could get were: 1. Improvement of revenue: A combined company can generate more revenue than two separate companies. Increases in income may come from marketing gains, strategic benefits and market power.

Profits Marketing is often claimed that mergers may produce higher operating income as a result of marketing activities. Such improvements can be made in the following areas: – The previous programming inefficient means of communication and publicity efforts. – In the weak current distribution networks. – In the unbalanced product mix. b.

This is an opportunity to take advantage in the competitive environment if certain conditions were to materialize. The strategic benefit is more an option than a standard investment opportunity. Fusion is an advanced point, a strategy that has allowed companies to develop a highly interconnected cluster of related products. c. Market power or monopoly, a company can fused to another to reduce competition. If so, prices may be increased to achieve monopoly profits, mergers that reduce competition does not benefit society. Empirical evidence does not indicate that the growing market power is a significant reason for mergers. If monopoly power is increased by an acquisition, all companies in the industry should benefit as the product price increases it. d. Cost Reduction: One of the basic reasons for a merger is that a company can operate more efficiently than two separate companies. e. Economies of scale: If the cost of production decreases with increasing the level of production is said to have achieved an economy of scale. The economies of scale grow to its optimal level. After that point, there are of scale, ie the average cost increases once past that point. f. Economies of vertical integration: from vertical combinations and horizontal can be achieved operational savings. The main purpose of vertical acquisitions to facilitate the coordination of operational activities closely related. Technology transfer is another reason for vertical integration. g. Resources: some companies acquire other to make better use of existing resources or to have the missing elements for success. h. Elimination of administration: there are some companies whose value can increase with a change of administration. In some cases, administrators do not understand the nature of changing conditions, can not abandon the strategies and styles that have made over the years. These two companies still are debated, but perhaps Oyuki unknowingly had found the main contact had been seeking.