Bonnie’s Bon Bons is a successful retail chain with franchises all ove

QUESTION

Bonnie’s Bon Bons is a successful retail chain with franchises all over the country, but it has no presence on the Internet. Catherine’s Confections is a successful mail-order business with no storefront presence.

The two companies decided to merge, which immediately gave Bonnie’s Bon Bons an Internet presence and opened the door to customers who wanted to buy Catherine’s Confections at retail locations. This merger represents a shortcut to growth, in which companies acquire rather than develop a capability.
Indicate whether the statement is true or false.

ANSWER

Answer: TRUE
Explanation: A frequent reason one firm will merge with another is so that it can quickly gain a capability, such as an Internet or retail presence, that otherwise would take a lot of time to build from scratch.