External Growth
What is external growth?
Growth through mergers, acquisitions, or partnerships rather than internal development.
Name one key stakeholder in a merger.
Employees, managers, shareholders, suppliers, customers, local communities.
What are economies of scale?
Lowering average costs per unit by producing larger quantities.
What is one positive environmental impact of a takeover?
Reduced environmental impact, unified standards, or investment into sustainable materials.
What year was this takeover?
2025
Give one reason companies pursue mergers.
To gain market share, enter new markets, acquire brands, achieve economies of scale, or reduce competition.
Which stakeholder benefits from cost synergies?
Shareholders benefit from expected profit increases or cost savings.
Name one way economies of scale reduce costs.
Bulk purchasing, shared administrative costs, production efficiencies, or logistics optimization.
What is a potential ethical issue from cost-cutting?
Poor labor conditions, layoffs, environmental risks, or stakeholder dissatisfaction.
Name one brand Gildan gained through the acquisition.
Hanes
What is the difference between internal and external growth?
Internal growth = expanding using own resources; External growth = expanding by merging or acquiring another firm.
Name one potential conflict between stakeholders in Gildan’s takeover.
Employees fearing layoffs or managers resisting new leadership.
How can economies of scale improve production efficiency?
Consolidating production, reducing waste, or standardizing processes after a takeover.
How can a takeover improve sustainability practices?
Implementing consistent environmental policies, investing in sustainable tech, or improving supply chain practices.
Where is Gildan headquartered?
Give a real example of external growth from this case.
Gildan acquiring HanesBrands.
Which stakeholders might face job loss in a merger?
Employees who may lose jobs due to overlapping roles.
How can bulk purchasing be an example of economies of scale?
Buying raw materials in bulk reduces cost per unit and increases production efficiency.
Why is ethical responsibility important during mergers?
Ethical responsibility maintains trust, ensures stakeholder wellbeing, and avoids legal or reputational issues.
What was one major reason Gildan pursued the HanesBrands acquisition?
Strategic advantages such as market expansion, gaining well-known brands, or increasing competitiveness.
Explain why external growth can be faster than internal growth.
External growth is faster because it provides immediate access to new markets, resources, or brands instead of building them internally.
Explain one way Gildan could manage stakeholder conflict.
Gildan could manage stakeholder conflict through clear communication, negotiation, or offering compensation/support to affected groups.
Give an example of how combined production facilities reduce costs.
Combining production facilities allows larger output, spreading fixed costs and lowering average cost per unit.
Give an example of how a merger can improve sustainability.
Example: improving working conditions while merging production facilities or ensuring fair supplier contracts.
Name one challenge Gildan faced when integrating HanesBrands after the acquisition.
Integration challenges like cultural differences, management conflict, employee uncertainty, or supply chain adjustments.