Writing Homework Help

Disc 1: An ice-cream manufacturer is proposing to acquire a soup manufacturer on the basis that, first, its sales and profits will be more seasonally balanced and, second, from year to year, sales and profits will be less affected by variations in weather.

Will this risk spreading create value for shareholders? Under what circumstances could this acquisition create value for shareholders? 

Disc 2: For its Zara brand, Inditex manufactures most of the garments it sells and undertakes all its own distribution from manufacturing plants to its directly managed retail outlets. The Gap outsources its production and focuses upon design, marketing, and retail distribution.

Applying the considerations listed in Figure 10.4, should Gap backward integrate into manufacture?