Advertisement
Published in:
2012 | OriginalPaper | Chapter
Selecting the right growth mechanism: The choice between internal development, strategic alliances, and mergers & acquisitions
Activate our intelligent search to find suitable subject content or patents.
Select sections of text to find matching patents with Artificial Intelligence. powered by
Select sections of text to find additional relevant content using AI-assisted search. powered by
When seeking to realize growth strategies, firms have three choices: internal development, alliances, and mergers & acquisitions. How to choose between these growth mechanisms is, however, not well-understood in practice. Managers seldom sufficiently strategically analyze this critical first step in any growth-related decision process. Instead, many managers commonly base their decision on “gut-feel” or simply follow successful traits. This chapter offers a framework to systematically guide managers in their choice of growth mechanisms. Four sets of factors should be simultaneously considered to decide on when to make, ally, or buy: the environment, the target, the growth strategy, and company-related factors. By systematically analyzing each growth mechanism’s context-specific advantages and disadvantages, firms may avoid mistakes that could not be compensated for in later implementation phases.