Exam 15: External Growth Strategies: Mergers,acquisitions,and Alliances

Strategic alliances frequently play an important role in a firm's internationalization strategy because:

Reckitt Benckiser's multiple acquisitions of consumer products companies have been motivated by its quest for:

In order to gain a new organizational capability,it is usually cheaper and less risky to acquire a company that already possesses that capability than to develop that capability internally.

The transformations of: - South African Breweries into SAB Miller,the world's second biggest beer company, - North Carolina National Bank into Bank of America Corporation,the #2 bank in the US - Comcast into the world's biggest media company Are evidence of:

Mergers and acquisitions represent paradoxes in the sense that:

Issues of pre-acquisition planning and post-acquisition management should be viewed as separate: activities best led by separate teams.

An important lesson from the troubled development of Boeing's 787 Dreamliner is that,for developing complex,technically-advanced products,the hub firm needs to have the capability to manage networks of strategic alliances.

Mergers and acquisitions go in waves.Because acquirers prefer to pay low prices for acquired companies,these M&A waves tend to be inversely correlated with stock market fluctuations.

In technology-based industries,the most common reason for established companies to acquire small,start-up firms is in order to:

Most of the biggest mergers and acquisitions since 2000 have been horizontal-i.e.between companies in the same industry.This reflects the fact that:

In the automobile and beer industries,acquisitions have been motivated primarily by the goal of international expansion.

The key difference between a merger and an acquisition is that,in the case of a merger,the participating companies combine to create a new company.

What distinguishes a joint venture from other types of strategic alliance is that in a joint venture:

Which are the following statements about pre-merger planning is untrue?

In most cases,the primary goal of a strategic alliance is to acquire that than simply to access the partner's organizational capabilities.

The main reason that a strategic alliance is often an attractive alternative to a merger or acquisition is:

The only clear finding from several decades of empirical research into the outcomes of mergers and acquisitions is that the shareholders of the acquiring firms lose money.

Identifying the strategic rationale and likely benefits of mergers and acquisitions is easier in the case of diversifying mergers and acquisitions than for horizontal mergers and acquisitions.

For acquiring firms,empirical studies show that,on average,the returns to shareholders are:

In the case of cross-border amalgamations of companies,concerns of national domination often mean that mergers are preferred to acquisitions.