Objectives
• You will be able to explain how businesses
can reinvest their profits to grow and
expand
• You will be able recognize the reasons
that cause firms to merge
• You will be able to identify two different
types of mergers
Growth Through Reinvestment
• depreciation = non cash charge for the
general wear and tear on capital goods
• Cash flow = the bottom line, the real
measure of profits
– Can be allocated to investors (as dividend) or
reinvested in the business
Growth Through Mergers
• Reasons for merging:
1. grow faster — desire to be a bigger
business quickly
2. efficiency—only need one CEO, CFO
etc.
3. need for new product lines
ex: phone companies bought cable tv
companies to offer internet & phone
as one package
4. Catch up w/ or eliminate rivals
ex: --Royal Caribbean and Celebrity Cruise
merged to double in size to catch up
to Carnival
--Staples tried to buy Office Depot but
the gov’t said NO—it would reduce
competition too much
Types of Mergers
• Horizontal
--2 or more firms that produce the same
kind of product
--ex. Exxon and Mobile
Ford and Volvo
Disney and Miramax
Bell Atlantic & GTE = Verizon
• Vertical
--firms involved in different steps of
manufacturing join together
--Ex: oil company owns oil field
refineries
gas station
Conglomerate
• A firm that has @ least 4 businesses
EX: Pfizer
—makes prescription meds (Lipitor and Viagra),
chewing gum (Trident, Dentyne),
razors (Schick),
cough drops (Halls),
breath mints (Clorets and Certs)
and antacids (Rolaids)
Household Cleaners
• Bounty
• Febreze
• Mr. Clean
• Swiffer
Antiperspirants, Deodorants, & Colognes
• Old Spice
Beauty – Makeup/Skincare
• Secret
• CoverGirl
Batteries
• Duracell
Feminine Care
• Always
• Tampax
Baby & Child Care
Health Care
• Charmin
• Align
• Max Factor
• Children’s Pepto Dish Washing
• Braun
•
Cascade
• Braun
• Clearblue Easy
• Clearblue Easy
• Dawn
• Gillette Complete Skincare • Fibersure
• Dreft
• Ivory
• Olay Laundry & Fabric Care • Metamucil
• Luvs
• Joy
• Pampers
• Bounce
• Pepto-Bismol
• Pampers Kandoo
• Cheer Oral Care • Prilosec OTC
• Pampers UnderJams Hair Care/ Color
• Downy • Braun
• PUR
•
Aussie
• Puffs
• Dreft
• Crest
• Vicks
• Clairol
• Era
• Crest Glide
Body Wash & Soap
• Head & Shoulders • Febreze
• Crest Whitestrips
• Camay
• Herbal Essences • Gain
• Fixodent Shaving
• Ivory
• Infusium 23
• Ivory
• Gleem • Braun
• Olay
• Pantene
• Tide
• Scope • Gillette Fusion
• Old Spice
• Oral-B • Gillette M3Power
Snacks
• Safeguard
• Gillette SatinCare
• Pringles
• Zest
• Gillette Venus
Baby Care
Products for the ones you love.
JOHNSON’S®

JOHNSON’S® BEDTIME™

JOHNSON’S® HEAD-TO-TOE®FRAGRANCE FREE

BABY LOTION
Wound Care & Tropicals
BABY.com

Care for cuts, scrapes, rashes and itching.
DESITIN®

BAND-AID® Brand Adhesive Bandages

NATUSAN®

BENGAY®

BABYCENTER®.com

SAVLON®

PENATEN®

NEOSPORIN®

PRIM’AGE®

CORTAID®

DAKTARIN®

COMPEED®

TUCKS® Hemorrhoidal Ointment

Skin & Hair Care
Johnson & Johnson RED CROSS® Brand

Care for your skin and hair.
EBE®
B
CLEAN & CLEAR®

ROC®

VENDOME®

NEUTROGENA®

JOHNSON’S®

skin ID™

ROGAINE®

AVEENO®

LUBRIDERM®

PIZ BUIN®

Vision Care
Products for vision care.
VISINE®

ACUVUE® Brand Contact Lenses

Nutritionals
Products for a healthier diet.
SPLENDA®

BENECOL®

LACTAID®

Oral Health Care
Care for your whole mouth.
LISTERINE®

LISTERINE® WHITENING®

REMBRANDT®

Over-the-Counter Medicines
Relief for pain, colds, coughs, allergies and more.
TYLENOL®

SUDAFED®

PEPCID®

NICORETTE®

MOTRIN®

IMODIUM®

DOLORMIN®

BENADRYL®

MYLANTA®

ZYRTEC® and ZYRTEC-D®12-HOUR®

Multinationals
• Corporation that has manufacturing or
service operations in a # of different
countries
Ex: GM, Ford, Nabisco, Mitsubishi,
and Sony
In India