A manager in your company is proposing the acquisition of Taylor Company, which has developed a new, innovative product, instead of adopting a strategy of developing new products in-house.All of the following arguments are correct EXCEPT:
A) the acquisition of Taylor should be primarily for defensive rather than strategic reasons.
B) research suggests that acquisition strategies are a common means of avoiding risky internal ventures.
C) the outcomes of acquisitions can be estimated more easily and accurately than the outcomes for an internal product development process.
D) acquisitions could become a substitute for innovation within your firm.

Question

Quizplus · Accepted Answer

Acquiring a company for strategic reasons, such as gaining new technology or market access, is a valid argument, whereas acquiring primarily for defensive reasons is not typically a strong justification.

A Manager in Your Company Is Proposing the Acquisition of Taylor