Question

BUSA 4980

1. What are the international strategies that firms utilize when expanding their operations and sales across multiple countries? Please describe.
2. What is the difference between a merger and an acquisition? Why do many mergers and acquisitions tend to fail in achieving the company’s objectives? Describe.

Answer 1

Solution : The various international stuategies that fuum utilize when expanding their operation o and sales acuos multiple countries are as follows: Expouting :- Expouting is a typically the easiest strategy of expanding the operation in multiple countries. Expouting is the sale of product and services o in foreign countries that are sowiced fuomo the home country. The advantage of this stuategy is that fium avoid The o expense VOR establishing u operation in the new country. I 2. licensing and franchising :- licensing and franchising o are two specialized 0 modes of entry that are allowing the Milum o to have metail presence in 0 overseas mouket with minimum mick. This stategy allow another person to assess the risk on behalf of company. In licensing and franchising company has to pay some moyalty fees to me theue brand name Vu, manufactwing, prouss, product patents , etc. Bl Joint venture :- luegureel mode of entry where

company donot mind in sharing there brand Rnowledge and expentise Company / fum wish to expand there business in overseas mauket by doing joint venture with local business. Both the paulies share the profit and loss associated with the burness. This mode mode is suitable in those countries where government donot allow 100% FOL. 0 FOI :- Making - level expansion is methods of an investment at international some of the strategies of using OFDI strategy. The FDI strategy aue : - Mengele 00 - Acquistion - Joint venture Difference chouacteristica Meaning O between meugel and acquisition Melegene Acquisition A meugen us the An acquisition is the fusion of two ou proces where by a more companies companies ou business I that voluntarily entity purchases or come Together to acquire's another youm a new entity one but no new ou company. company us formed.

• Purpose | Ameugeu happens To consolidate an ito deluease "combetlion instantaneous as well as to quowth. unuease operational efficieny size of company The size of the The acquining menging companies company us us moue ou laugur ou bigger less the same. than the acquired one • Teum A meuger is An acquistion is considered as friendly considéued as and planned you a either voluntary ou unvoluntary and can be u hostile. Example The biuth of smith- Tata motor kline beecham acquining Taguau. habbened as a and land Mesult of the Rover meugel. O between Cyloxo Wellcome and Smith kline Beecham Reasons to why fail meugeu and in achieving acquistion tends the companies

Lobjective are as follows :- omneus : umited ou no involvement from the owneus. Appointing M4 A aduisous at high coste you various services. But leaving everything to them sust because they get high fee is a clear sign leading to failure. Aduisou o usually have a limited Mole until the deal is done owneu should be involved ught from the start and rather duive and structure the deal on their own, letting aduisous take the assistance uole. Theouelical valuation versus practicale proposition el future benefits: The number and o assets that look good on paper may not be the meal winning factor o once the deal is through The failed fase o bank of America's o aca uisitions on 0 country wide us a typical example Neacliations enous Cases of oure paying sou an acquisition also Mampant in execalling MAA deale leading to financial lance hence failures