Acquiring an existing firm operating in a foreign country rather than undertaking internal development may be the least risky and cost-efficient means of overcoming entry barriers such as:

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10-03-2020
Business

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Acquiring an existing firm operating in a foreign country rather than undertaking internal development may be the least risky and cost-efficient means of overcoming entry barriers such as:

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monica789412 monica789412 · Answer 1 · 2020-03-17T13:44:08+01:00

Acquiring an existing firm operating in a foreign country rather than undertaking internal development 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 relationship with key government officials

Explanation:

When a firm takes a decision to acquire a firm which is operating in other foreign company ,it enjoys the below mentioned advantages:

The firm does not face any entry barrier
The cost of acquiring a firm is less in comparison to the cost the company would have incurred if it opted for the internal development of a firm .
The acquired firm already has a established market in its home country ,so less cost is incurred on advertisement.
The acquired firm also has a pre-existing network of suppliers,local distribution network.Thus the firm faces less problem in its operations.

Thus for a company who wants to succeed quickly without putting much effort can always opt for the acquisition strategy in foregin Market.