International Business: Acquisitions vs Alliances Strategies Analysis

This report examines the use of acquisitions and alliances as alternative growth strategies in international business, based on the article by Dyer, Kale, and Singh (2004) from the Harvard Business Review. The report highlights that while acquisitions and alliances are often treated as interchangeable methods for achieving growth, they are distinct strategies with varying advantages. Acquisitions, typically involving market-based pricing, may lead to uncertainty, whereas alliances often foster higher cooperation. The report references studies that emphasize the importance of strategically evaluating both approaches to determine the most suitable strategy for a given situation, considering factors such as available resources, industry dynamics, and a company's capacity for collaboration. The report also highlights how companies such as Cisco, have successfully used both acquisitions and alliances to expand their business. The report concludes that businesses can improve their outcomes if they correctly assess the two strategies of acquisition and alliance.

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Acquisitions and alliances have been considered as the two vital pillars of growth
strategy. However, most organizations tend to disregard the two as substitute mechanisms for
successful attainment of goals. Dyer, Kale and Singh (2004) have stated that as a result, modern
business enterprises tend to acquire firms which they aim to collaborate with and further create
challenges for acquisitions as well as alliances. Cummings . and Worley (2014) have identified
the way in which two strategies tend to vary in ways whereby acquisition negotiations tend to be
highly viable and primarily based on market prices, resulting to increase uncertain situations
while alliances show high cooperativeness as well as bargaining power. Companies in recent
times have been consistently setting up acquisitions in order to efficiently augment scale or
reduce expenses and further engage into joint venture for penetrating new markets, client
segments and regions. However, if a business executes an alliance it eventually gains the
propensity to enter into alliances even when circumstances stipulate acquisitions (Dyer, Kale and
Singh 2004).
At this juncture, Dunning (2015) has stated the way several competitive business
enterprises an M&A group, reporting essentially to the finance head efficiently handles
acquisition process whereas a distinct business development entity tends to seek collaboration
after alliances. The two units proficiently execute of diverse locations and consequently avert
companies from evaluating the gains and losses of the strategies. However, according to Dyer,
Kale and Singh (2004), businesses can develop their results if they efficiently evaluate the two
strategies of acquisition and alliance in order to determine most appropriate strategy for the
particular situation. Moreover, companies such as Cisco which primarily utilize acquisitions and
alliances proficiently have the capacity to expand at the better rate in comparison to its
competitors (Cummings . and Worley 2014). Scholars as a result have offered a suitable

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framework in order to aid modern organizations analytically decides between acquisition and
alliance by strategically evaluating three sets of factors considering the resources as well as
synergies which they anticipate, the industry in which company aims to operate along with
capacity level of company to efficiently involve into joint ventures and collaboration.

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References
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage
learning.
Dunning, J.H., 2015. Reappraising the eclectic paradigm in an age of alliance capitalism. In The
Eclectic Paradigm (pp. 111-142). Palgrave Macmillan, London.
Dyer, J.H., Kale, P. and Singh, H., 2004. When to ally and when to acquire. Harvard Business
Review.