Reference no: EM132170146

Part 1: Post a Response

"Alliances and Acquisitions" Please respond to the following:

- From the case study, compare and contrast the Merger and Acquisitions (M&A) from China and India. Speculate on which country's acquisitions are likely to generate more value for the stakeholders. Provide a rationale for your response.

- From the case study, compare and contrast the Merger and Acquisitions (M&A) from China and India. Speculate on which country's acquisitions are likely to generate more value for the stakeholders. Provide a rationale for your response.
Read the article titled, "Industry Determinants Of The ‘Merger Versus Alliance' Decision." Agree or disagree with the following statement: Alliances provide a greater likelihood of international success for a firm than acquisitions. Justify your response.

**As attach file**

Part 2: Respond to a Peer

From the case study, compare and contrast the Merger and Acquisitions (M&A) from China and India. Speculate on which country's acquisitions are likely to generate more value for the stakeholders. Provide a rationale for your response.

Indian firms have a greater success rate of generating value for their shareholders because they are have a higher rate of successfully closed business deals. This could be attributed to the fact that their business ventures are backed by private business groups which are inevitable owned by individuals who have had to learn how to do business through trial and error.

Therefore, their business practices are guided by individuals who can operate on intimate understanding of the business environment and draw upon their past successes and the possess ability to learn quickly from mistakes and missteps. China's state-owned enterprises will inevitably incorporate a lot of politicians who are not so well versed in business practices and, therefore, may not fully comprehend the nuances of the business world leading to rash and/or poor decision-making.

Read the article titled, "Industry Determinants Of The ‘Merger Versus Alliance' Decision." Agree or disagree with the following statement: Alliances provide a greater likelihood of international success for a firm than acquisitions. Justify your response.

M&As will be more likely than alliances in capital-intensive industries. M&As will be more likely in industries where M&As have been the dominant mode of collaboration. M&As will be more likely than alliances in industries characterized by high levels of tacit knowledge. M&As will be more likely than alliances in industries with moderate levels of concentration. M&As will be more likely in industries where recent regulatory activity, especially antitrust activity, has been low. M&As will be more likely in industries where high-status firms predominantly choose M&As. (Yin, 2008)

Alliances will be more likely in industries characterized by a high level of specialized human asset intensiveness. Alliances will be more likely than M&As in industries where technological uncertainty is high. Alliances will be more likely than M&As in industries with high levels of concentration.

Alliances will be more likely in industries where there has been recent regulatory activity, especially antitrust activity. Alliances will be more likely in industries where alliances have been the dominant mode of collaboration. Alliances will be more likely in industries where high-status firms predominantly choose alliances. (Yin, 2008)

M&As and alliances will be equally likely in industries characterized by high levels of capital intensiveness an specialized human asset intensiveness. Where funding and other resource requirements dictate the choice of M&As versus alliance, firm behaviors will conform to those dictates. (Yin, 2008)

This question is difficult to either agree or disagree with after reading this article. Yin (2008) makes the case that several factors must be examined when deciding whether an M&A is preferable to an alliance or vice versa. If the firm is involved in capital-intensive industries where M&As are historically the dominant mode of collaboration between firms and there are a small number of large incumbent firms dominating the market.

Then the likely choice is for a new firm to merge with or acquire another firm that already has a foothold in the market so as to make competition easier. M&A also require greater investment than alliances and a lot more legalities so if there is less government regulation it makes it easier to establish a merger or acquisition. If the firm is a manufacturer or seller of high-end, high-status goods and the market is already filled with rivals and competitors that are M&As then that is the most opportunistic course of action for new entrants.

On the other hand, alliances are less costly in most cases than M&As so if employees are highly trained and possess special knowledge than an alliance is more likely because there is less requirement of sharing of proprietary information in a specialize and trade setup such as an alliance creates. Also, where there is high levels of concentration within the industry an alliance is preferable because of the smaller number of firms dominating the market allows for the opportunity for firms to work together and still maintain independence of operations and revenue streams.

Overall, after reading this extremely informative article I believe the decision to merge, acquire or ally with another firm upon entering a foreign market depends very highly on the specific industry, individual firm, competitors already present in the market, as well as the market itself.

There are also factors such as available resources, employees, national governments, local culture, etc. that are critical to the decision-making of executives in the firm that wishes to expand.