Question

A pharmaceutical giant acquires a manufacturer of rare specialty drugs to improve its falling share prices and invests all its wealth into the deal. Due to a deficit, it agrees to do a joint venture for the acquisition and involves a major automobile giant to fund the deal. After a rocky start, the companies now have a strong market position and generate good profits. Which of the following regarding the company's strategy is true? It fails the Performance test. It fails the Competitive Advantage and the Fit tests. It is a winning strategy. It fails in all three tests. It fails the Fit test, but passes the Competitive advantage and Performance tests.

Answer 1

Answer:

It is a winning strategy.

Explanation:

As a result of joint venture, after all the ups and downs, the company is in a strong financial position, as company is producing good profits. Also the company has great market position.

Once a great market position, the influence is spread in the market.

Further, in the given instance the company has failed to acquire the manufacturing company individually, but with joint venture, the company has now established connections not only in pharma sector but also in automobiles.

These things affect the company's position and then influence the market, attracting more customers for the product, and more investors for investment.

Therefore, it is a winning strategy.