ITPEC IP October 2023 Question 82

Gaining functions the company lacks from other companies through acquisition, to speed up business deployment — that is the purpose of M&A (mergers and acquisitions).

M&A combines companies (merger) or buys control of one (acquisition). Instead of building a missing technology, sales channel, product line or customer base in-house, which takes years, a company acquires a business that already has it and puts it to use at once. Buying time is the main strategic reason for M&A.

Answer (d)

Why not others:

• •(a) — describes value chain analysis: the flow of activities that add value to a company's products and services
• •(b) — describes dividing a company by business or region, as in a divisional or in-house company structure, to give each unit autonomy
• •(c) — describes BPR (business process reengineering): drastic redesign of business processes using IT

Key rule: M&A buys capabilities and time from outside the company; value chain analysis, divisional organisation and BPR change how the company itself works.

Business Strategy Management · AI-written, may contain errors