118. Which of the following is an advantage of acquisitions as a means of entering foreign
markets?
119. Which of the following is an advantage of acquisitions as a means of entering foreign
markets?
120. Which of the following is an advantage of an acquisition as a means of entry into foreign
markets?
121. Which of the following postulates that top managers typically overestimate their ability to
create value from an acquisition?
122. Which of the following is a reason why firms often overpay for the assets of an acquired
firm?
123. The management of an acquiring firm is often too optimistic about the value that can be
created via an acquisition and is thus willing to pay a significant premium over a target firm’s
market capitalization. This is known as the _____ and is the reason why acquisitions fail.
124. Which of the following is a reason why acquisitions, a mode of entering foreign
markets, fail?
125. Spring, an American firm, recently acquired another company known as Tazel Inc. in
Indonesia. The high-level managers at Tazel Inc. quit because they could not cope with the
domineering and straightforward approach of their American counterparts. This illustrates how
acquisitions may fail because:
126. Which of the following is a way in which the risk of failure of an acquisition can be
reduced?
127. Which of the following is an advantage of acquisitions as a means of entry into foreign
markets?
128. To reduce the risks of failure of an acquisition, managers must:
129. An advantage of a(n) _____, a mode of entry into foreign markets, is that it provides a firm
with much greater ability to build the kind of subsidiary company that it wants.
130. An advantage of a(n) _____ as a mode of entry into foreign markets is that it is much
easier to build an organization culture from scratch than it is to change the culture of an acquired
unit.
131. Which of the following is a disadvantage of greenfield ventures as a mode of entry into
foreign markets?
132. Which of the following is a disadvantage of greenfield ventures as a mode of entering
foreign markets?
133. If a firm is seeking to enter a market via a wholly owned subsidiary where there are
already well-established incumbent enterprises, and where global competitors are also interested
in establishing a presence, a(n) _____ is a suitable mode of entry.
134. If a firm is considering entering a country where incumbents exist, and if the competitive
advantage of the firm is based on the transfer of organizationally embedded competencies, skills,
routines, and culture, then a _____ is the preferable mode of entry.