The word beachhead has been used in describing the process of entering a new industry to exploit perceived opportunities. The beachhead is used to spawn new opportunities based on "intangible" relationships. One example is Procter & Gamble's initial acquisition of the Charmin Paper Company as a beachhead that allowed Procter & Gamble to develop a highly interrelated cluster of paper products—disposable diapers, paper towels, feminine hygiene products, and bathroom tissue.5

Market Power One firm may acquire another to increase its market share and market power. In such mergers, profits can be enhanced through higher prices and reduced competition for customers. Of course, mergers that substantially reduce competition in the market may be challenged by the U.S. Department of Justice or the Federal Trade Commission on antitrust grounds.

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