Firms eg medtronic eg teva pharmaceuticals cephalon

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Unformatted text preview: ducts that are new to the firm. current • New ventures/products require an average of 8 years to New achieve profitability achieve • About 88% of new products fail – Returns are more predictable because of the acquired Returns firms’ experience with the products. firms’ – E.g., Medtronic – E.g., Teva Pharmaceuticals + Cephalon 1–12 Acquisitions: Lower Risk Compared to Developing New Products • An acquisition’s outcomes can be estimated An more easily and accurately than the outcomes of an internal product development process. an – Managers may view acquisitions as lowering risk Managers associated with internal ventures and R&D investments. investments. – E.g., Teva Pharmaceuticals + Cephalon 1–13 Acquisitions: Increased Diversification • Using acquisitions to diversify a firm is the Using quickest and easiest way to change its portfolio of businesses. of • Both related diversification and unrelated Both related diversification strategies can be implemented through acquisitions. through • The more related the acquired firm is to the The acquiring firm, the greater is the probability that the acquisition will be successful. the...
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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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