External Growth Flashcards
What is a takeover
A type of acquisition that occurs when one organisation purchases another
What is the difference between a joint venture and a strategic alliance
A joint venture is when two businesses pool there rescources together
A strategic alliance is the same but can be less permanent
What are some benefits of a joint venture
BUsiness expansion
Moving into new markets(like overseas)
Development of new products reduces risk of growth strategy
Benefit from synergy
What are some disadvantages of a joint venture
Risk of clash of organisational cultures
Objectives of each jv partner may change- conflict of objectives
May be an imbalance of levels of expertise , investment or assets
What’s the actual difference between a jv and a strategic alliance
A jv creates a new entity
With a strategic alliance the two or more companies remain separate entities
What are the disadvantages of a strategic alliance
The companies don’t benefit from synergy
Legal disputes over eho owns what
Benefits for businesses of mergers or takeovers
Gain new management with different skills and ideas
Increase in revenue and market share
Meet customer needs more effectively eith combination of rescources
May experience economies of scale
Disadvantages of takeovers
Very expensive
Could result in redundancies
Could result in higher prices for customers
May suffer from diseconomies - issues with communication
The business May have to take kn extra debt
