Эссе на тему: According to Dyer et al. (2004) “most acquisitions and alliances fail”. What criteria should managers use to determine whether to enter into an alliance with or acquire another firm and how can they increase the chances of success when following either strategy?
According to Dyer et al. (2004) “most acquisitions and alliances fail”. What criteria should managers use to determine whether to enter into an alliance with or acquire another firm and how can they increase the chances of success when following either strategy?
Acquisitions and alliances are one of the most widespread ways of development for the majority of companies because they allow increasing of activity scales. There are following motives for acquisitions and alliances: economy of scales, increase in efficiency of work with suppliers, diversification of cooperation in the field of research and development, eliminations of duplicating functions, reduction of taxes, customs payments and other fees, motive of monopoly, advantages in the capital market, elimination of management inefficiency, motive of complementary resources, conclusion of important contracts, motive of access to information, difference between disposal value and current market value, personal motives of managers, aspiration to increase the political weight of company’s management, «too big to fail»-motive, forced business developments. A detailed analysis of change in competitive environment, technologies and consequences of competitors’ are required to provide advantage of acquisitions and alliances transactions.
Acquisitions and alliances can increase efficiency of the joint companies, but they can also worsen results of the current production activity, strengthen bureaucracy. It is difficult to predict all the changes caused by acquisitions and alliances. According to Dyer et al. (2004) «most acquisitions and alliances fail». And this statement is quite reasonable. According to Mergers & Acquisitions Journal, 61% of all acquisitions and mergers don't pay back investments made in them. And the research of 300 acquisitions over the last 10 years carried -out by Price Waterhouse, showed that 57% of companies which came from acquisitions and alliances lag behind other similar market representatives on indicators of development and are compelled to be divided into independent corporate units again.
Эссе на тему: According to Dyer et al. (2004) “most acquisitions and alliances fail”. What criteria should managers use to determine whether to enter into an alliance with or acquire another firm and how can they increase the chances of success when following either strategy?
