Ability market power is increased by horizontal

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Unformatted text preview: peed to market 1–9 Acquisitions: Increased Market Power • Market power is increased when: – A firm’s size, resources and capabilities give it a superior firm’s ability to compete. ability • Market power is increased by: – Horizontal acquisitions Horizontal • E.g., AT&T + T-mobile – Vertical acquisitions Vertical • E.g., Oracle + Sun Microsystem – Related acquisitions Related • E.g., Amazon + LOVEFiLM 1–10 Acquisitions: Overcoming Entry Barriers • Overcome Entry Barriers – Entry barriers are factors that increase expense and Entry difficulty in trying to enter new market largely due to • Economies of scale • Differentiated products • Overcome Geographic Entry Barriers Overcome – Cross-Border Acquisitions are made between companies Cross-Border with headquarters in different countries with – E.g., LDK Solar (NA market) – E.g., Tata Motors + Jaguar & Land Rover 1–11 Acquisitions: Cost of New­Product Development and Increased Speed to Market • Internal development of new products is often Internal perceived as high-risk activity. perceived – Acquisitions allow a firm to gain access to new and Acquisitions current pro...
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This note was uploaded on 04/28/2013 for the course MGMT 491 taught by Professor S.cho during the Spring '12 term at Washington State University .

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