Question

Acquiring an existing firm operating in a foreign country rather than undertaking internal development may be the least risky and cost-efficient means of overcoming entry barriers such as:

Answer 1

Acquiring an existing firm operating in a foreign country rather than undertaking internal development may be the least risky and cost-efficient means of overcoming entry barriers such as-Gaining access to local distribution networks,building supplier networks,and establishing working relationship with key government  officials

Explanation:

When a firm takes a decision to acquire a firm which is operating in other foreign company ,it enjoys the below mentioned advantages:

• The firm does not face any entry barrier
• The cost of acquiring a firm is less in comparison to the cost the company would have incurred if it opted for the internal development of a firm .
• The acquired firm already has a established market in its home country ,so less cost is incurred on advertisement.
• The acquired firm also has a pre-existing network of   suppliers,local distribution network.Thus the firm faces less problem in its operations.

Thus for a company who wants to succeed quickly without putting much effort can always opt for the acquisition strategy in foregin Market.