Accounting help on:Acquisition Strategy 

Equity Alliances take care center stage Peter Pekar Jr. and Marc S. Marguli Introduction The suggested strategy for Hero cycle to enter Canada particularly British Columbia is through an acquisition strategy. Her Hero cycles intend to purchase Crown west steel fabricators so that it can get steel as a raw material reducing its costs drastically. This article briefly compares the acquisition strategy to the joint venture strategy. Acquisition strategy is opposite to that of Joint venture strategy hence using this article we will compare the advantages and disadvantages in order to analyses the benefit or harm of Hero cycles to enter the market through the acquisition strategy Discussion According to Peter and Mark when the opportunity is very large and the window time for exploitation is narrow a company needs to quickly move and form some kind of an alliance. There are ways to do so either by getting into a joint venture or acquisition or buying a stake in the company. It is considered that to be a market leader it is necessary to join hands with another company to gain power and dominance in a new market. There is also a pressure on the companies of reducing costs and gain maximum profits. Acquisition requires a huge capital and managerial resource to enter a new market. Hence this strategy is a very disadvantageous for Hero Cycles to enter the market with a huge capital. This means that it will take more time for the company to cover up the investment costs and show profits. By entering the market with an acquisition strategy, Hero cycles have an advantage of reducing its cost of purchasing steel from local manufacturers and can use that material in making their own cycles. When a company enters a new market there are a few barriers that it has to pass. They are particularly capital and managerial resources. One cannot be successful in all the markets unless he has sufficient time money and personnel, hence to enter such a market it is important to get into an alliance which are formed on shared risks and shared resources. This means that the company himself is not responsible for the upliftment or down fall of the alliance in a certain market. An alliance increases shareholders value and helps gain competitive advantage. In case of hero cycles as it is acquiring a steel manufacturing company it will not have the advantage to Acquisition Strategy