Consolidating industry need that
In the early 1900s, the first wave saw the mergers that created steel and oil monopolies, while there was massive deregulation in the 1980s and 1990s that led to the sixth wave in banking and telecommunications. 2015 saw the biggest year ever for M&As: There was .7 trillion in announced mergers and acquisitions, nearly doubling the amount from 2014.
That trend continued in 2016, led by notable deals between AT&T and Time Warner, and Bayer and Monsanto. In recent years, the Federal Reserve has kept interest rates very low, which has boosted stock prices despite the weak economy.
Finally, the industry enters the last phase of consolidation.
During this phase, the industry completes an entire structural change, characterized by changes in capitalization, dynamics, and market share mix (New Venture Lab.com).
When consolidation begins to take shape initially, mistakes are likely to be made.
During this first wave of consolidation, resistance from companies will occur.
At this point, any mistakes that were made during the first phase of consolidation will be neatly taken care of so that the process moves smoothly going forward.
By gathering an understanding of the direction moving forward, these businesses can better prepare themselves for what is to come, solidifying their ability to take on challenges as they arrive.It tends to be these companies that get the ball rolling in the process of industry-wide consolidation.This, however, does not always mean doom and gloom for the smaller companies and industry players.When discussing the possible death of small business as we know it, it’s impossible to avoid the elephant in the room: Big business is getting bigger, swallowing up the resources, market share, and consumer support that used to be more evenly distributed among all types of companies. One is the current extended period in which government has, broadly, been less willing to regulate business and financial markets, including monopolistic interventions.Though there’s some debate about the exact effects and causes, some say that this has been behind the increased mergers and acquisitions, consolidating power in the hands of a few major companies.