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chapter 7
Acquisitions
19
Management
Undergraduate 4
08/08/2007

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Term
horizontal acquisitions
Definition
purchase of competitor in the same market as the firm
Term
vertical acquisition
Definition
purchase of a supplier or distributer of a firm's goods
Term
takeover
Definition
an acquisition in which the company being bought company doesn't ask to be bought
Term
hostile takeover
Definition
company being bought reacts negatively to being bough
Term
merger
Definition
two companies combine on relativey equal basis
Term
ACQUISITIONS...MERGERS...TAKEOVERS
Definition
FREQUENCY FROM GREATEST TO LEAST
Term
target screening
Definition
deciding which of multiple acquisition opportunites are worth close examination
Term
target selection
Definition
focuses the acquiring firm on one target
Term
target negotiating
Definition
take place with the executive of the targeting firm
Term
due diligence
Definition
rational process by which acquiring firms evaluate target firms
Term
leveraged buyout
Definition
restructuring strategy in which a party buys all or part of a firm's assets in order to take the firm or a part of a firm private
Term
foreign direct investment
Definition
process through which a firm directly invess in a market outside its home country
Term
liability of foreignness
Definition
cost and risk of doing business outside a firm's domestic market
Term
multidomestic strategy
Definition
an action plan that the firm develops to produce and sell unique products in different markets
Term
global strategy
Definition
an action plan that the firm develops to produce and sell standardized products in different markets
Term
transnational strategy
Definition
produce and sell somewhat unique and somwhat standardized products in different markets
Term
exporting
Definition
process of sending goods and servies from one country to another for sale
Term
licensing
Definition
entering an international market by leasing the right to use the firm's intellectual property to a firm doing business in the desired international market
Term
franchising
Definition
licensing of a good or service and business model to partners for specified fees
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