1
Q
Porter’s tests for a successful acquisition? (2)
A
1) The better off test - Would shareholders simply be better off buying shares in target company?
2) The cost of entry test - Are there cheaper ways of entering the market?
2
Q
Key issues with any joint development strategy? (3)
A
1) Sharing risks and returns
2) Possible conflicts
3) Confidentiality
3
Q
Advantages of acquisition? (4)
A
1) Quicker
2) Get round barriers to entry
3) One less competitor
4) Synergies
4
Q
Disadvantages of acquisition? (4)
A
1) Entry cost may be too high
2) Clash of cultures
3) Easier to control growth if organic
4) Reputation of the target company
