Franchising is an alternative to pursuing growth through mergers and acquisitions

Research has shown that the more different the acquired firm is in terms of competencies and resources than the acquiring firm, the more likely the acquisition is to be successful

A horizontal acquisition involves two firms in the same industry

Which of the following is NOT a characteristic of a successful acquisition?

Downsizing may be necessary because acquisitions often create a situation in which the newly formed firm has duplicate organizational functions such as sales, manufacturing, distribution, and human resources management

In terms of results, one attribute of a successful acquisition is that a firm with strong complementaries is acquired and overpayment is avoided

Synergy is created by the efficiencies derived from economies of scale and economies of scope and by sharing resources across the businesses in the newly created firm’s portfolio

Most acquisitions that are designed to achieve greater market power entail buying a competitor, a supplier, a distributor, or a business in a highly related industry

Company experiences show that participation in and overseeing the activities required for making acquisitions can divert managerial attention from other matters that are necessary for long-term competitive success

Unrelated diversified firms become overdiversified with a smaller number of business units than do firms using a related diversification strategy