Merger From the Perspective of the Firm,

¶ … Merger

From the perspective of the firm, Pfizer and Wyeth can combine their diverse strengths and capabilities, and merge their talents and skills thus enabling them to become more profitable and lucrative. Doing so, they will be able to reach more clients, solidify their already existent client base, and, possibly, expand into other areas whilst establishing themselves in other states and/or in other parts of the globe.

More specifically, advantages to the firm include the fact that:

Quality staff, or additional skills, non-existent in one's own firm, can be acquired

That additional knowledge of the industry or sector can be gained;

That the business intelligence of other firm (or each particular company) can add to current experiences and knowledge;

That there is enhanced access to asses for new products and business development;

That the larger company can now gain a wider customer base, therefore increasing market share;

That there is diversification of services, products, and enhanced prospects for long-term business success

7. The mergence may offer the opportunity of reducing costs and overloads

8. The mergence reduces competition.

Mergers can leverage the value of the company whilst leading to tax gain and reducing costs. In this way, they can also help the company weather tough times. In numerous ways. Mergers benefit companies and as long as the mergence of Pfizer and Wyeth is accomplished in a smart way that is profitable to both, Pfizer and Wyeth, separately, stand a good chance of benefiting from their newly-formed partnership.

As regards the consumer, too, Pfizer being the world's foremost research company in matters of heath and wellness, and pooling up with Wyeth the rival drug maker can expand their resources and skills, a s well as knowledge to immeasurably advance the field of medicine and help it conquer a deal more diseases. Matching today's global environment, the mergence -- as Kindler, Pfizer's CEO pointed out, offer consumers "complementary patient centric units that match speed with the benefit of a global company's scale and resources" (NY Times).

On the other hand, mergence can be threatening to the public as a whole since it disallows smaller companies to flourish and successfully compete. By businesses becoming oligopolies, they usurp the market place and tend to swallow up resources and competition. More so, using the allocative efficiency model, monopoles tend to increase price above the marginal cost of production proving disadvantageous to consumers. Allocative efficiency occurs where there is an optimal distribution -- amongst different companies -- of goods and services, and when these different companies equally, but in their own way, consider consumer's preferences. Here, the price will equal the marginal cost or production since consumers pay for the marginal utility that they receive. Firms in Perfect Competition are supposed to produce at an allocatively efficient level, but when monopolies -- such as Pfizer and Wyeth - dominate the market - prices can become allocativley inefficient, since they reduce competition and arbitrarily hike prices.