Step-by-step explanation:
A merger can be defined as the combination of two companies to form a new larger company with more resources. It can occur through agreements or acquisition.
1- For companies, the benefits of a merger can be:
- Economies of scale,
- Market gain,
- Greater profitability,
- Increased research and development.
The drawbacks can be:
- Communication failures due to company growth ,
- Difficulties in coordinating processes,
- Conflicts between organizational values .
2- For consumers the benefits can be:
- Most innovative and technological products and services,
- Greater corporate responsibility for society ,
- Increased company reliability.
The drawbacks can be:
- Higher prices ,
- Monopoly power.
The monopoly is a bad market configuration for the consumer, due to the lack of competition in the market, which leads to a production restriction and obliges the consumer to pay the prices established by the monopoly companies, without the consumer having the choice.