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What are the benefits of collaboration between a large appliance and a finance company?

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ranger1980 | Student, Undergraduate | Valedictorian

Posted March 19, 2013 at 12:52 AM via web

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What are the benefits of collaboration between a large appliance and a finance company?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted March 19, 2013 at 1:12 AM (Answer #1)

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If a finance company and a large appliance company form a collaborative relationship, they can form synergies that will help both companies.  The major reason for this is that many large appliances are more easily afforded by the average consumer if they can be financed instead of paid for in full at the time of purchase.

From the appliance company’s point of view, this collaboration would be good because it could increase sales.  By providing financing, the company would make it much more possible for more consumers to buy the large appliances that it makes.  This would be good for the appliance company because higher sales are typically preferable.

From the finance company’s point of view, the collaboration also brings in more business.  Finance companies want to find people to whom they can lend.  Lending money brings in revenue in the form of interest payments.  If the finance company forms this partnership, it can get something of a captive set of consumers who will be much more likely to borrow from it. 

Thus, this collaboration helps both sides.  It allows both companies to do more business than they otherwise could.

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