Internet Merger
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Mergers and acquisitions can take place for a variety of reasons: a company may seek to eliminate competition by purchasing a competitor; investors may want to sell the assets of the acquired company; a merger may give both companies access to technology and entry into other markets they would not otherwise gain. In the case of CDnow and N2K, the merger is an attempt to bring together two Internet competitors for the purpose of strengthening the position of both in the Internet marketplace. When mergers between similar companies take place, there are often redundancies in the resulting workforce. These redundancies can result in a workforce reduction (layoff), which can have significant ramifications for employees who are laid off, those who remain, and the company as a whole. This research examines the merger activity at CDnow and considers the labor relations actions that the resulting company should take to maximize its performance.Founded in 1994, CDnow is an online "store" which sells compact discs (CDs) and related products. Sales are made entirely through the Internet, with no physical store locations to support the sales effort. The company does not maintain any inventory, but uses a third party (Valley Media) for order fulfillment. This structure means that the company is able to operate 24 hours a day, seven days a week, and that customers are able to shop from their home or office using their computer. Credit cards are req
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sts are not likely to decrease as the company encounters even more competition, and profits will eventually have to be generated if the company is to remain viable.
Opportunities of Merger
The greatest opportunities arising from the merger come from the rapid acceptance of the Internet as a way to conduct business. As increasing numbers of consumers not only become connected to the Internet, but become convinced that electronic commerce is an effective and efficient way to conduct business, retailers have considerable opportunity to capture those consumers.
The type of retailing in which the merged company participates is particularly well suited to this. Because images (cover art, photographs of clothing and other related pictures) can be displayed on the various Web sites, consumers can quickly browse various items for the one they want. In addition, the databases at the various sites make it possible for consumers who are not sure what product they want to select from a particular artist's collection or a specific type of music. Having the ability to download music samples also helps the consumers decide whether or not to purchase a particular album.
Customizable CDs, a product which CDnow already offers its customers,
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Some common words found in the essay are:
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Approximate Word count = 4025
Approximate Pages = 16 (250 words per page)
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