Question

What challenges are common in external growth strategies? (More than one answer can be selected)


Cultural clashes


Fewer market opportunities


Higher upfront cost


Integration difficultie

Answer 1

The common challenges associated with external growth strategies include:

1. **Cultural clashes** - When companies merge or acquire others, differences in company culture can lead to conflicts and impede successful integration.

2. **Higher upfront cost** - External growth strategies often involve significant financial investment, both in terms of acquisition costs and potential costs associated with integration.

3. **Integration difficulties** - Merging operations, systems, and processes can be complex, and challenges in successfully integrating the acquired entity can hinder the expected benefits of the external growth strategy.

"Fewer market opportunities" is typically not considered a challenge of external growth strategies, as these strategies often aim to increase market reach and opportunities.

Therefore, the correct answers are **Cultural clashes**, **Higher upfront cost**, and **Integration difficulties**.