Foundations of Business Strategy | Online Course Support

An e-cigarette company is acquired by a major tobacco company for $25 million. Within a year, it generates $75 million of revenue in excess of previous estimates. What might explain how the tobacco company was able to make this deal?

 
 
 
 
 
 

Although competitors did not recognize the value of the e-cigarette company, the tobacco company recognized the value of the firm and the market growth potential and was able to purchase the firm for a bargain price.

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