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Advantages:

* Speed: Acquisition provides ability to speedily acquire resources and competencies in European market. It allows entry into new products and new markets. * Decrease risks and costs of new product/new market development. * Market power: Market share increases and Competition decrease. * Achieves Synergistic benefits.

* Overcome entry barrier: Ansell can overcomes market entry barrier(The risk of competitive reaction decrease)

Ansell can acquire:
1. Economies of scale
2. Diversify into new areas.
3. Opportunities to cross-sell to each other's customers
4. Improve public perception of Ansell.(More reliable, Better brand recognition) 5. Cut out some management salaries.
6. Make savings in central functions, such as finance, administration 7. Make savings on supply chain activities:
a. Greater negotiating power for purchasing raw materials b. Operations: Sharing manufacturing facilities
c. Distribution
d. Sales and marketing.

Ansell can acquire assets at a relatively low price.
* Access to specialist machinery, knowledge and expertise * Ownership of physical assets such as premises.
* Experienced workforce such as sales force

Failure can be extremely expensive
1. Ansell business may suffer.
* Ansell management may be tied up with the acquisition and overlook problems closer to home. * Expose Ansell to the risk (for example, if Ansell have borrowed heavily to fund the acquisition). 2. The acquired business may underperform.

* Ansell management skills may not be transferable to the acquired business. * Key employees might leave.
* Hidden problems may emerge after the acquisition.
* Integration problems: cultural fit can be problematic (Trying to merge two cultures can be a long and disruptive process) 4. Acquisitions BACKFIRE
* Probability of that the former business owners set up a similar venture again. There is a big risk...

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