Acquisition of an existing firm rather than going de novo may be the least risky

Question

Acquisition of an existing firm rather than going de novo may be the least risky and cost-efficient means of overcoming entry barriers such as

gaining access to local distribution networks, building supplier networks, and establishing working relationships with key government officials.

moving directly to the task of transferring resources and personnel, integrating and redirecting activities into its own operation.

putting its own strategy into place.

accelerating efforts to build a strong market presence.

All of these.

gaining access to local distribution networks, building supplier networks, and establishing working relationships with key government officials.

moving directly to the task of transferring resources and personnel, integrating and redirecting activities into its own operation.

putting its own strategy into place.

accelerating efforts to build a strong market presence.

All of these.

Explanation / Answer

Answer is All of these.

The reason is as follows: An already established firm will have resources ready that reduces the cost of establishment and expansion which is very high in order to start a noval firm. Also acquiring an established firm, the resources of the firm can be easily integrated and used immediately within no time and the operations can be started with the existing suppliers of the acquired firm by making few changes in the strategies. The brand image of the acquired firm will be an added advantage for quick acceptance and strong market presence that is less cost efficient with no entry barrier.

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