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Acquisitions

May simply involve one business buying a business or part of a business from another (possibly because the other firm wants to focus on its core business) or, more aggressively, takeovers, where one company buys a controlling stake (51%) of another firm. This usually happens when the target company is floated on the stock market and its shares are publicly traded. Growth through acquisition can provide rapid entry into new markets. However, there is a key concern associated with rapid growth, namely that it can result in diseconomies of scale. Thus, a business needs to ensure that growth is not too rapid in order to allow appropriate systems to develop to cope with the coordination and control problems that growth can bring. Furthermore, growth through acquisition can create conflicts between the various stakeholders and create specific challenges that need to be overcome: Management and staff redundancies; Differences in culture resulting in conflict within management; Differences in IT and other systems may also make integration difficult; Confusion in brand values.

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