What factors make it most likely that (a) acquisition or (b) internal new venturing will be the preferred method to enter a new industry?. Management

An acquisition will be a preferred method to entry when a company lacks the distinctive competences necessary to compete in a new industry. Moreover, acquisition seem to be a good choice when the company operates in the embryonic or growth industries and it needs to rapidly establish a presence in the particular industry. The acquisition is a quicker and less risky way of establishing a significant market presence in comparison to internal new venturing. In addition, acquisition is a preferred way when a company wants to enter a business with high entry barrier. In regards to the internal new venturing, it seems to be a better choice for companies with a business model based on technology, innovation and design. Hence, it is a preferred method for companies with strong Research and Development. Internal new venturing is also proffered method of entry to newly emerging or embryonic industry. In these stages of industry development, there is no company with dominant competences or business-model.