The purpose of a(n) ________ acquisition is to reduce the number of competitors in a mature industry in which capacity exceeds decreasing demand.
A) vertical
B) overcapacity
C) geographic roll-up
D) market-expansion

Question

Quizplus · Accepted Answer

An overcapacity acquisition is the best choice because it aims to reduce the number of competitors in a mature industry where capacity is greater than the decreasing demand. This type of acquisition is beneficial as it helps to eliminate excess capacity and reduce competition, which can lead to higher prices, profitability and overall industry stability. Vertical acquisition involves acquiring a company in the same industry but at different stages of the value chain, geographic roll-up acquisition involves merging with companies in different geographic locations, and market-expansion acquisition involves acquiring companies in related but different industries to expand the market reach.

The Purpose of A(n) ________ Acquisition Is to Reduce the Number