An acquisition is used to enter a foreign market
An acquisition is used to enter a foreign market where a company gains control of an existing firm in the host country by purchasing its stock for a public institution or purchase price for a private company. Recently, foreign acquisition accounted for 60% of all acquisition, which means companies are finding it a suitable strategy in entering an international market. This foreign market is appealing because it gives the acquiring company an already existing market quickly. Although initially, this technique appeared expensive, the difference in the value of currencies makes them affordable. For instance, if the acquiring firm wants to purchase a company in a country with a weaker currency relative to its own, then the acquisition price will be lower. Conestoga college should, therefore, enter into the New Zealand market by purchasing an already existing private college. Besides, the Canadian currency is always stronger relative to New Zealand, making the requisition cheaper. Also, the college will have already market and will avoid the long bureaucratic process encountered when setting a new college. Cultural barriers will not be an issue as the college will retain most of the host country’s human resources.
Organizational structure is a system that defines organizations’ hierarchy. It specifies how the organization has structured its activities as its aim to achieve its goal and objectives. Although there are various organizational structures, Functional structure will fit the new college in New Zealand. A functional structure is where an entity is divided into smaller units with specific functions. For instance, an organization can be divided into the marketing, finance, and services divisions, Each division has its leader who steers the firm’s goals. The advantage of this structure is that employees are divided by the skills they have and their respective functions, which allows them to direct their synergies on their functions. However, Conestoga college should strive to eliminate lack of interdepartmental communication, which is usually prevalent with this structure.