New ventures are likely to be preferred compared to acquisitions when
A) entry barriers are high.
B) exit barriers are high.
C) a company's business model is based on using its technology to innovate new kinds of products for related markets.
D) the company needs more mega-opportunities.
E) the industry is in the mature stage of the industry life cycle.

Question

Quizplus · Accepted Answer

When a company's business model is based on using its technology to innovate new kinds of products for related markets, it is best to pursue new ventures rather than acquisitions. This is because the company's expertise lies in innovation and creating new products, rather than acquiring existing ones. Acquisitions may also entail integration challenges and may not necessarily lead to successful innovation.

New Ventures Are Likely to Be Preferred Compared to Acquisitions