Merger Case

Oligopoly means that there is only a few firms compete in the market such as most countries’ newspaper and television market. Generally these firms sell similar and branded product in the market. There is a significant barrier to enter into the oligopoly market since the advertising and marketing are quite expensive for each firm to invest in. And also, each firm is quite sensitive on the action of one firm so that strategic planning is required for each firm to response to the change and decision of one firm. Another type of oligopoly is duopoly. It is a specific type of oligopoly because only two firms compete in the market. In oligopoly market, each firm is interdependent on other firms and owns the same market share. On the other hand, the possibility of collusion and merger between one firm to another is very high since there are only a few firms in the market. Therefore, the tacit coordination on pricing policy between each firm will be achieved easily.

Nestlé is a Swiss company that mainly produces nutritional and health-related food products. It is the world’s leading nutrition, health and wellness company. “Good food, good life” is the promise Nestlé commits to every consumer everyday and everywhere. Its definition is to enhance our life with nutritional and healthy food and beverages. Nestlé’s products are quite various include baby food, cereals, confectionery, chocolate, cookies, snacks and pet food. It has about 29 brands and around 450 factories which are operated in about 86 countries.

Perrier is a France company that produces bottled mineral water. Well, the bottled Perrier is made from a spring in Vergèze in the Gard département of France. The spring is naturally carbonated. The water and the natural carbon dioxide gas are not acquired in the same time. However, the carbon dioxide gas will be poured into the water until the level of carbonation in the bottled Perrier is same as the water of the Vergèze spring.