Routes to Strategic
Development
 Internal Ventures (Organic
development)
 Acquisition
 Joint Ventures (Alliances)
Internal New Venturing
 The Attractions of Internal New
Venturing
 New Venture Pitfalls
 Scale of Entry
Scale of Entry, Profitability, and Cash
Flow
Profitability/Cash Flow
(+)
Large Scale
Small Scale
O
(-)
Time
Acquisitions as an Entry
Strategy
Attractions of Acquisitions
 When Firm Lacks Important
Competencies in a New Business Area
 When Speed Is Important
 Perceived to Be Less Risky
 When the Incumbent Firms Enjoy
Significant Protection from Barriers
to Entry in an Established Industry
Acquisitions as an Entry
Strategy
Acquisition Pitfalls
 Post-Acquisition Integration
 Overestimating Economic
Benefits
 The Expense of Acquisitions
 Inadequate Pre-acquisition
Screening
Acquisitions as an Entry
Strategy
Guidelines for
Successful Acquisition
 Target Identification and
Pre-acquisition Screening
 Bidding Strategy
 Integration
Joint Ventures as an Entry
Strategy
Attractions
 Share the Substantial Risks
and Costs Involved in a New
Project
 May Increase the Probability
of Success in Establishing a
New Business
Joint Ventures as an Entry
Strategy
Drawbacks
 Requires the Firm to Share
the Profits
 Runs Risk of Giving Away
Critical Know-how to a
Possible Future Competitor
 Venture Partners Must Share
Control
Restructuring
 Why Restructure?
 Exit Strategies
 Divestment
 Management
Buyout (MBO)
 Harvest and
Liquidation