GNDU B.Com (Bachelor of Commerce)

Chapter 4: Mergers, Networking, Franchising, E-Commerce and IP

Summary

Modern businesses grow and compete through combination and new forms of organisation. A merger is the fusion of two or more firms into one, while an acquisition is the takeover of one firm by another; in India such mergers and acquisitions help firms gain scale, market share, technology and synergy, though they require regulatory approval. Networking links firms or units to share resources and information, increasing reach and efficiency. Franchising is an arrangement in which a franchisor allows a franchisee to use its brand, products and business system in return for fees and royalties, spreading a proven format quickly with the franchisee's capital. Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) involve contracting out business processes or knowledge-intensive work to specialised providers, often across borders; India is a major centre for both. E-commerce is the conduct of business transactions over electronic networks, and online trading allows buying and selling, including of shares, over the internet, cutting cost and time and widening markets. The unit also covers intellectual property rights: a patent protects a new invention, a trademark protects a brand name, symbol or logo that distinguishes goods, and a copyright protects original literary, artistic and similar works. These rights give the owner exclusive use for a period and encourage innovation and brand-building.

Key terms

Important questions

Practice quiz