Reasons (Aims/Objectives) for merging/integration

1. To expand the market in form of increased sales resulting from large production.
2.     To ensure efficient management, that is,   different firms can combine   different   management skills which enable them to operate more effectively   and efficiently.
3. To reduce on the risks involved in business operations. This is because   under   mergers   risk bearing economies   of scale can be enjoyed through diversification   in production.
4. To monopolize business activities. When  a number  of firms combine  to form  one large firm, they can outcompete   other  small  firms  hence  enjoying  the monopoly  power.
5. To increase employment opportunities. A number of business activities   are created due to large scale of production   hence more employment   opportunities.
6. To increase resource utilization. A combined   big  firm  can be able to raise  more  capital  in order to increase  on  the  utilization   of resources   and  produce   more  goods  and  services,   in  case  small firms have been operating  at excess  capacity.
7. To ensure reliable supply of raw materials. For example when one firm is using bi-products  of another firm as its source of raw materials.
8. To increase on the profits of each firm within the merger due to the large scale of operation  of the merger.
9. To ensure increased quality and quantity of output. For example, through joint research,  firms can be able to improve on the quality of their products.
10. To promote specialization in production. Each   firm under   the   merger    can   specialize    in producing  a given product.  This increases the efficiency and output of each firm.

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