A company considering entering an industry that is in the mature stage of its life cycle would generally prefer which of the following entry strategies?
A) Joint ventures
B) New ventures
C) Acquisitions
D) Long-term contracting
E) Taper integration

Question

Quizplus · Accepted Answer

When a company enters an industry in its mature stage, it is likely that many of the existing firms have relatively stable market positions, established brand names, and economies of scale that make it difficult for new entrants to secure a foothold. In such an environment, acquisitions offer the most attractive entry strategy. By acquiring one or more existing firms, the entrant can leapfrog the initial stages of the life cycle, leverage existing capabilities and resources, and enter the market with a presence that otherwise would not be available. Joint ventures, new ventures, long-term contracting, and taper integration are less attractive options in this context because they are all less likely to yield the benefits of scale and scope that the acquiring company is seeking.

A Company Considering Entering an Industry That Is in the Mature