Risk management

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Risk Management II

Pre assignment

Being employed as the risk manager of the company, I will give you some feedbacks regarding the purchase of Zesty Incorporated in the United States of America.First of all, I would like to tell you about my positive feelings regarding this acquisition. In fact, by increasing the production size and volume, the company will be able to decrease costs (unitprice decrease generally from 20%).
To make an acquisition constitute a quick way to develop scale economies, especially regarding research, development, distribution and management costs. Moreover,the increase of treated quantities will give us a negotiation power toward our suppliers in order to de crease their provision costs.
The connection between our two companies will enable us to winsome market share and to maximize the earnings of the group. The complementarities synergies will give to the company the means to access new markets. The main complementarities will be geographic: thetwo companies can benefit from their respective establishment, and by product: the group will be able to propose a full offer to its clients.
This acquisition will enable the group to go round theentry barriers, as regarding the notoriety than the technical skills.
To be bigger make companies more powerful in order to take new risks in the global competition. An external growth operation allowsincreasing significantly its financial power, to decrease risks to be able to take now the necessary decisions for the growth of tomorrow.

However, to make an acquisition is not without dealingwith some risks. The main risk is about the integration of the two different cultures, teams, which pass from the position of maybe competitors to those of colleague in a context where it is essentialto create synergies.
It is very important to act quickly, to be transparent, fair and be in a growth dynamic.

The social aspect in an acquisition is considered as a risk to well manage and to...
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