What Does Sister Company Meangeorge
As a company becomes a conglomerate, the divisions between its subsidiaries and sister companies can become blurred. For example, while media giant Viacom Inc. counts Viacom Media Networks as a subsidiary, Viacom Media Networks` underlying cable channels, including Nickelodeon, BET and Spike, are considered sister companies. By owning these channels, advertising packages can be purchased cheaper and more efficiently. At the time of writing, US multinational media giant Time Warner Inc. has several subsidiaries. They are all sister companies. Sister companies are subsidiaries that are related to each other because they have a common parent company. Each sister company operates independently of the others and, in most cases, produces independent product lines. A subsidiary, also called a subsidiary, is a company that has another organization. For example, a large human resources department may have several subsidiaries, each specializing in temporary work in a different industry.
The organization owning the subsidiaries is a parent company. The level at which subsidiaries operate independently of other subsidiaries and their parent company depends on the organization, but typically parent organizations make many business decisions at the highest level within their subsidiaries. In some cases, sister companies may compete in the same sector, while in other cases they may operate in completely different markets. For example, an airline conglomerate may own multiple airlines operating in the same regions and competing for the same customer base. Alternatively, a public transport conglomerate may own one company that operates one railway line and another that operates multiple bus routes, limiting direct competition between these two sister companies. Typically, organizations that own subsidiaries do not launch products or services that compete directly with their subsidiaries, although this can sometimes happen. Subsidiaries may compete with their parent company, but any revenue generated by a subsidiary also belongs to its parent organization. If a parent company launches products or services itself without the help of a subsidiary brand, it may end up competing with products that its subsidiaries also manufacture. For example, a multinational organization that owns a subsidiary may also launch a soap product under the name of its own organization that competes with its subsidiary`s products. The Fox News channel, an American cable and satellite news channel, has the same parent company (21st Century Fox) as the British channel Sky News – and manufactures the two sister companies. Fox News` other sister channels are Fox Business Network, Fox Broadcasting Company, Sky News Australia and Sky TG24.
Parent organizations often ask their sister societies to work together to achieve common organizational goals, although this is not always the case. These common goals may include, for example, promoting the parent company`s brand or pursuing the same mission or values. In addition, sister companies can work together to sell the same product or service. For example, two sister bakery companies may both promote the use of the same cooking oil in their recipes as their parent company produces. According to the Journal of Accountancy, there are obvious advantages to owning 80% or more of a subsidiary`s voting shares. One of the tax benefits is the right to file a consolidated tax return, which can help the parent company offset losses incurred by either the parent company or the acquired company by reducing taxable funds. Suppose a parent company makes a profit of $5 million for the acquisition taxation year and the subsidiary that bought it records a loss of $1.5 million. A consolidated tax return allows the parent company to offset its profit with the loss of the subsidiary. In this example, the parent company pays taxes on $3.5 million instead of $5 million. Sister companies that share similar markets can benefit from joint marketing and advertising campaigns. In some cases, sister companies may enter into agreements with each other that offer special prices or access to information or products. However, sister companies remain separate entities and do not have direct tax benefits.
Southern Charm Plates and Double Crown Cutlery are sister companies. Its parent company, Kitchen Blast, recently asked it to work together to launch a meal kit that includes its two products. They plan to share the revenue from the dining room between the two companies proportionally based on the cost of the items in the set. Organizations can also create sister companies by creating multiple subsidiary brands. For example, a shoe manufacturer may create two different brands, one for children`s shoes and one for adults. These two brands may refer to each other as sister companies. The sister company is a company owned by the same parent company as another company. It should be noted that a parent company may have one or more subsidiaries in which all sister companies are related to each other. Parent companies often determine the degree of independence of sister companies from each other. Sister companies may operate completely independently of each other or rely on each other for certain features or pursue common goals. For example, a multinational grocery organization may have multiple food stamps, each operating completely independently.
Alternatively, the same multinational organization may require all its companies to conduct the same advertising campaign or promote the same product in its stores, thereby reducing the independence of sister companies from each other.