Summary
Mergers among states
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Extract
Mergers and acquisitions.
TALK ABOUT empire has become a cliche. Historians and economists busy themselves comparing America's contemporary role with Rome, Napoleonic France and imperial Britain. They assume that empire is the only model for a state seeking to project power and influence--ignoring alternatives from the business world. After all, businesses confront many of the same difficulties that states face. When competitors emerge, firms undergo pressure. A corporation may reduce the cost of its products by cutting the costs of raw materials and labor, increasing sales and finding new technological fixes--just as a state might try to increase economic growth, enhance productivity or develop new weapons systems. But if a company reaches the limits of its economic market, it may consider a merger with like-minded companies to cope with a competitor.
States reaching the limits of their viability as self-sufficient actors can adopt merger strategies, too. Indeed, to preserve its global influence throughout the course of the 21st century, this is a path the United States must consider. Why do companies pursue mergers? Mergers give companies greater flexibility. They achieve greater scale without increasing production. If new products are involved in the merger, a combined firm can avoid anti-trust problems. Larger scale allows a company to maintain its position in the industry. Usually it can invest in new products, run higher advertising budgets and sometimes achieve lower prices. A large producer can get raw ma...See the full content of this document
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