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Volvo Case

Ans1 : Volvo's motives for acquiring Samsung CED in 1998 :
Scale economies and Product alterations: In large scale process, for companies like VOLVO export's reduce costs over more units of output. For such products, especially if they are standardized or undifferentiated from those of competitors, the cost per unit drops significantly as output increases .The more the the product has to be altered to the foreign market, the more likely it is that production will shift abroad.
Vertical Integration: It is a company's control of the different stages of making its product from raw materials through production to its final distribution. One way to help assure this flow is to gain voice in the management of one or more of the foreign operations by investing in it.
Rationalized Production: companies produce different components or different portions of their product line in different parts of the world to take advantage of low labor costs, capital and raw materials. Another advantage......


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Approximate Word Count: 914
Approximate Pages: 4 (250 words per double-spaced page)

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