Research Paper on:
Burger King and British Drinks Diageo Company

Unformatted Sample Text from the Research Paper:
be changing their core competences gradually, diversifying or even just expanding. For many companies the 1990s saw the ideas proliferated that the bigger a company was the better. This was  equated to economies of scale and scope that were seen as positive moves, hence the growth of large conglomerates. The motivational factors are often seen as the ability to create  shareholder wealth, either by increased economies of scale or scope, or due to the purchase of comparative advantages such as specialist technologies, especially where it is perceived these may lead  to a competitive advantage (McGahan, 1994). The need for diversification was seen where markets that were existing had only limited growth potential in  the existing markets. For a company such as Diageo, a drinks company, that was seeking to grow, the market it operating in had potential. However, the drinks market is also  mature, and as such growth is not fast nor is it potentially high. The need for growth means that there can be a diversification with the purchase of a company  that is undervalued and where Diageo felt it could create more value by changes within the company or by synergies that can be created. As the purchase of Burger King  was in the food and drink related sector, this may be classes as a related diversification. The first stage is to consider why they may have looked at this action  and undertaken a diversification strategy. The philosophy behind acquisitions is usually that the total of the combined entity will be greater than the sum of its parts that existed  before the merger (Pilloff, 1996). It is generally perceived that the main gain of many acquisitions will be due to increase in the performance in the post acquisition company. This