Fin 370

Integrative Problems and Virtual Organization Strategy Paper

FIN 370

Integrative Problems and Virtual Organization Strategy Paper

The purpose of this paper is to aid Lafleur Trading Company’s decision to expand its operations through an IPO, acquisition, or merger. Providing an educated compilation of the strengths and weaknesses of each approach as well as both opportunities and threats associated with these three options is the objective. Comparing and contrasting each factor will help determine the best decision with respect to Lafleur Trading Company and its desired goal.

Strengths of Each Approach

Lafleur Trading Company could benefit from the initial public offering, or IPO, process. As an organization that supplies fine foods and wine, it has exceptional potential to reach a higher plateau of success through globalization, trade, and superior goods. An IPO has numerous strengths; new capital, increased liquidity of share holdings, future access to the public capital market, and a higher profile by becoming a publicly traded firm (Keown, Martin, Petty, & Scott, 2005, p. 413). “When the firm sells its shares to the public, it acquires new capital that can be invested in the firm,” explains the advantage of raising new capital (Keown, et al., 2005, p. 413). Regarding liquidity, possessing interest and assets easily translated into cash is important for any business for investment purposes or in the event unplanned circumstances require payment. The public capital market provides public investment for capital making access to this market easier in the future (Keown, et al., 2005). Finally, a higher profile encourages the competitive edge for Lefleur Trading Company because it entices other selling or supply agencies to the firm.

Another option Lafleur Trading Company should consider is acquiring another firm in the same industry. Acquisitions have various strengths such as establishing cost efficiency through economies of scale; managing supply...