🎉 Welcome aboard, young entrepreneurs! Dive into the tale of Statson Inc. and how it grew its empire. 🌆

Statson Inc. (SI) makes...wait for it...faucets! Yep, those things we turn on when we need water. They decided to join forces with another faucet champ, FlowForm Ltd (FF), but here's the twist - FF still ran on its own but took up the SI name.

Advantages? Reduced costs (like promotions), a more popular brand, and their sales chart going 📈!

But wait, there's a catch! As they grew, deliveries slowed down, and customers felt they were just a number in SI's phonebook. 😥

• Acquisition

  • When one company (the buyer) buys most, or all, of another company’s (the seller) shares to gain control of that company.
  • Features: a. Continued Independent Operation: Even after the acquisition, the bought company (in our story, FF) can keep running separately. b. Merged Identity: The acquired company often takes the name of the buyer (like FF becoming SI).

• Economies of Scale

  • Cost advantages that companies get due to their size, production, or scale of operation. Think of it like a discount for buying in bulk!
  • For SI? Merging reduced promotional costs. They also got to flex their muscles and get better prices from suppliers.

• Diseconomies of Scale

  • The disadvantages of growing too big. Sometimes, size isn't everything!
  • For SI? They faced a telephone game issue, with communication breakdowns between old SI and FF.