When it comes to developing new products and capabilities, there are 8 possible strategies each with different costs and level of control. Acquisition is one of the 8 strategies, and it may or may not be the strategy of choice.
Take a look at the following:
Internal development | Highest cost | Most control |
Acquisition |
|
|
Minority investment | ||
Joint venture | ||
Franchising | ||
Licensing | ||
Management contract | ||
Outsourcing | Lowest cost | Least control |
These 8 strategies are listed in a specific order, with internal development providing the most control at the highest cost, and outsourcing providing the least control at the lowest cost. As you can see, acquisition provides a high level of control at a high cost. If this is not what your firm is looking for, one of the other 8 strategies should be considered.
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