You are the Chief Executive Officer (CEO) and considering a diversification. Your Chief Financial Officer (CFO) recommends an acquisition, whereas an external advisor recommends an alliance. Historically, your company has been equally successful in acquisitions as in alliances. Should you therefore be indifferent between these two options?
Even if your acquisitions and alliances have done equally well, we may expect an alliance to do better in certain situations and to do worse in other situations compared to an acquisition.
