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s’ acquisition of American Banker’s Insurance Group Example: acquired Example: British Petroleum’s acquisition of . Amoco Increased Market Power Acquisition intended to reduce the petitive balance of the industry Overe Barriers to Entry Acquisitions overe costly barriers to entry which may make “startups” economically unattractive Buying established businesses reduces risk of startup ventures Lower Cost and Risk of New Product Development Example: Nortel’s acquisition of Bay Networks Example: Kraft Food’s acquisition of Boca Burger Example: JiaoDa’s acquisition of Caiyuan Reasons for Acquisitions Increased Speed to Market Closely related to Barriers to Entry, allows market entry in a more timely fashion Diversification Quick way to move into businesses when firm currently lacks experience and depth in industry Reshaping Competitive Scope Firms may use acquisitions to restrict its dependence on a single or a few products or markets Problems with Acquisitions Example: Marks and Spencer’s acquisition of Brooks Brothers Example: Intel’s acquisition of DEC’s semiconductor divisio