BUS 346 Study Guide - Final Guide: Greenfield Project, Takeover, Country Risk

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 346
• Professor: Chang H Oh

Document Summary

Acquiring a company in the same industry holds specific advantages and disadvantages: (time gains and resource gains) a well-orchestrated acquisition is the most time-efficient entry strategy. This strategy involves instant market penetration by acquiring resources such as capital, labor, plant and equipment from competitor. Trade secrets etc: (economies of scale) -[add this to both pop-up and acquisitions]. Expanding abroad will allow the company to increase sales and produce goods more cost efficiently. This will result in falling fixed costs, managerial resource efficiency, specialization of labor, volume discounts and financial economies (cite textbook pg388/131) The disadvantages of acquisitions is as follows: (integration) integrating two organizations can be extremely difficult. Establishing a permanent presence abroad makes the acquiring company vulnerable to financial risk, country risk and legal risk. (this is maybe sometime to add to the section of why we picked indonesia)