Question

Discuss the difficulties of pursuing acquisitions/diversification. What can be done to improve the chance of success for acquisitions/diversification?

With real world example

Answer 1

Acquisitions/diversifications require a good and efficient team becuase dealing with a single product is different from dealing with a variety of products. It needs to have experienced leaders who can give proper advises. The organisation also needs to have manpower and capacity to control other markets. This is because the organisation might be strong in one market but this cannot guarantee the strength of the organisation in the other markets. To overcome all these hurdles the organisation need to have a special committee who will look after all the required documents and plans for the acquisition / diversification. We also need to consult experts and take their opinion in this process. This will help the organisation take correct and efficient decisions. For example Reliance industries started with petroleum and telecom and now it is a vast empire with various diversifications and acquisitions which are successful and are yielding profits for the company . This is due to their management who are efficient and their strategies which turned out to be correct.