GBE#6

Acquisitions fail because companies lack the understanding of culture.  When an acquisition is made there is a change in culture between both companies. The people who are working in the company tend to be uncomfortable and they often leave.

Why are Greenfield Ventures attractive?
Greenfield ventures are attractive because developing countries tend to give subsidies and can give positive human capital and deliver positive returns over the long run.
What are the advantages and disadvantages of both?
Acquisitions
Pros: Most time efficient growth strategy, Reduce competition Stronghold, Short term gain due to asset stripping
Cons: Runaway costs, difficulty in managing resources when there is diverse products, Company cultural clash
Greenfield Ventures
Pros:  work with relevant authorities in the beginning, commitment to market will be sollid, be able to implement the best long term strategy  
Cons:  High cost, difficult to overcome competition,  entry process can be long


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