Integrative Problems and Virtual Organization Strategy

Integrative Problems and Virtual Organization Strategy

Sandra Kessler, Mary Falank, Yvonne Minus, Cheryl Banes, Gregory Martin, Isaac Snow

FIN 370

April 16, 2012

Dr. Russel Riggs

Integrative Problems and Virtual Organization Strategy

Introduction

Before deciding upon what method a company is going to choose for expansion, each approach needs examination. For this, the company must look at the strengths, weaknesses, opportunities, and threats of each expansion method. Expansion methods include going public through an IPO, acquiring another organization in the same industry, or merging with another organization. Another factor for consideration is the affects globalization will have on the business operations, including considerations about exchange rates and the risk involved in such a volatile market as well as the many other situations that may arise from operating in a global economy.

Strengths and Weaknesses of Initial Public Offering (IPO)

Berry’s Bug Blasters wants to expand operations. One way to raise capital for this project is through an Initial Public Offering (IPO). Berry’s sees a financial benefit for going this route because of the capital they will raise. The additional capital will allow Berry’s to fund their expansion and allow them to pay off some existing debt. Another benefit to the IPO is the increased public awareness of Berry’s, making the service more widely known. An IPO does have some disadvantages. Publically held companies are subject to more regulations than privately held companies are. With an IPO, Berry’s will have to disclose all of their financial information to their investors and they will be under close scrutiny by investors looking for profits. In addition, the Securities Exchange Commission (SEC) closely regulates public companies so Berry’s must adhere to the Sarbanes-Oxley Act.

Strengths and weaknesses of Acquisition

Another option for Berry’s Bug Blasters to expand operations is through acquiring another...