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Question:

You are required  to write a case study. You will be trained in class on how to write this. You need to choose a company for your case study that is relevant to the topics covered in this unit.Your word limit is 3000 words plus or minus 10%. This excludes references that are at the end of the case study. Also, there should be NO appendices.

Answer:

Executive Summary:
Merger is one of the crucial elements of strategic management that is used for business expansion. However, there exist debates over the benefits derived through merger in reality. Companies are often unable to identify the benefits derived from merger. The current study conducts a critical review of existing literatures related to merger and acquisition along with a financial analysis of both Singapore airlines and Virgin atlantica. The study is mainly based on secondary data analysis. The study reveals that the merger between the two companies mentioned above did not bring any significant benefit to the financial performance and financial position of the two companies.

There has been marginal improvement in profitability and revenues however fall in liqudity position of the company remains a concern. The study suggests that both Singapore airlines and Virgin atlantica needs to focus on cost reduction, business expansion in unexplored markets and implement BSC approach in the organisation.

1.1 Introduction:
Merger and acquisition has long been two of the most popular strategies for business expansion. Companies indulge in merger or acquisition to expand business as a part of the corporate strategy. Several studies have also been conducted in this area. Merger refers to a business partnership through which two or more companies share individual resources and work together for common interests. On the other hand, an acquisition refers to the purchase of a business by another firm. However, a majority of the modern scholars are of the view that merger and acquisition do not bring any real benefit to the concerned companies.

There have been several cases of failure of merger and acquisition across the globe. The current study is concerned with the critical evaluation of merger and acquisition in context to the case of atlantic airlines and virgin in Singapore. The study seeks to find out if the concerned merger had been able to improve the financial performance of the companies or not.

1.2 Importance of the study:

Companies often resort to merger or acquisition to expand business operations but often fail to understand if the said merger or acquisition has fetched any significant financial benefit in reality or not. Inability to properly recognise the benefit of merger can be critical as entering into a merger involves huge financial costs and other strategic implications. The issue is more critical at modern times because of intense market competition and rapid changing business environment. The current study is pivotal to the corporate world and the scholars as well as it conducts critical review of existing literatures along with financial analysis to understand the impact of merger between Atlantic airlines and virgin in reality. The study further helps in understanding the benefits and weaknesses of the concerned merger

 1.3 Context of the companies:

Singapore Airlines: Singapore airlines is one of the largest airlinesin Asia that operates in multiple countries. The company was established in 1947 with the incorporation of Malayan Airways Limited. The company has acquired Virgin Atlantica in the last decade and has also evidenced sharp growth since its inception. Virgin Atlantica: Virgin Atlantic was formed in 1984 as British atlantic airways. Currently, only 51% of the stake is owned by the company.

In 2012, the company took the seventh place in the Uk airline in terms of passengers’ travelled for the year.

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