According to game theory, participants who decide to
collaborate will do so in anticipation that their efforts
will be rewarded, which is to say: if they decide to form
an organized partnership with another company, it is
because the framework of the partnership is mutually
beneficial and will not be detrimental to the advantages
that a company could achieve independently. As an
example, look at a computer hardware company and a
computer software company; a merger between these
companies would be mutually beneficial since there is an
overlap in their market base. They are both serving the
data and technology industry. Software companies
produce the intellectual resource that computer
hardware companies need in order for their products to
operate. Therefore, it provides a strategic incentive for
these companies to collaborate.
In the first place, they can increase their size through
manpower. This means that they can tackle more
projects and perform more tasks that have to do with
enterprise and growth; sales can be reinforced, and more
ideas to do with improvement and innovation can be
achieved. An article by professor Gerald Faulhaber
suggests that the relative size of a company implies its
effect on future growth, which is to say, when a company
merges with another company in essence it has already
benefited from introducing new products and a
diversified work force along with a greater marketing
presence that on its own it would have failed to
accomplish (Computer Industry Mergers and
Acquisitions, University of Pennsylvania, 2009).
