Know-How Exchange : Student Questions

Dear theracetrackers

Some companies choose to enter new markets by internally developing new products and services, while others, as we have been discussing, do so through mergers and acquisitions.

Have we been discussing this? Sorry, I must have nodded off.

Anyway, the advantages of internal development are that costs, time, and staffing can all be closely monitored. Confidentiality can be retained. And if things go south, the loss can be controlled a little more closely. And in certain cases, there may well be less perception of risk and long term loss.

The disadvantages would seem to be isolation from the outside world, lack of public exposure (for the times that things go right and when they go wrong), lack of regulatory accountability and oversight (Bernie Madoff and Robert Maxwell being classic examples), and generally, the whole notion of glasnost may not apply, and in certain cases, and depending on how much net gain or loss might be at stake, may not need to be applied—or so the thinking might go, from way on up high.

I hope this helps.

Gary Bloomer
Wilmington, DE, USA