ACCA SBL Syllabus C. Strategy - Strategy Development - Notes ^{10 / 10}

Internal Development

Often called 'Organic growth'

1. Build on company's core competencies

2. Suits a Risk-averse culture

3. Easier to Control & Manage

4. Slow

5. Growth restricted by own competencies

6. Better for growth at home rather than abroad

Acquisition & Mergers

1. Fast to new markets

2. Gains new competencies

3. High risk due to initial costs

4. Funding problems of initial costs

5. Problems with cultural fit

Strategic Alliances

2+ businesses share resources to pursue a strategy

1. No large initial costs

2. No cultural fit problems

3. Specialise on each businesses own competencies

Types of STRATEGIC ALLIANCE

• Joint Venture 

  A new organisation is set up

  Both venturers put in resources

  Formal & slow

• Licence agreement

  Allow others to use your resources in a new market

  Less Control

  If successful the other venturer may then develop their own and thus not need the licence

  Needs little initial costs

  Needs trust and cope ration