Enterprise merger and acquisition and alliance are the two basic ways of enterprise external growth, comparative study of decision makers deal with these two kinds of strategy, through analysis, the two assessment, make the appropriate choice from.
1, the strategic motivation
M & A is conducive to the protection of the production and business operation element specificity and entrepreneurial ability to raise the overall, long-term interests to achieve more than the alliance enterprise. If it is to enhance the entrepreneurial capacity locally, or is a breakthrough in a certain project, but did not want to be involved and affect other parts of the running of the company, the strategic alliance offers a more flexible organization.
2, the elements characteristics
When the target of production elements has a very important significance for enterprises, as far as possible through mergers and acquisitions will be under control. If the merger and acquisition conditions are not ripe, it should be the establishment of enterprise alliance. If the target of production elements is not particularly important, the choice of external expansion mode mainly depends on the risk -- benefit performance.
3, risk return
From the income side, mergers and alliances are conducive to the enterprise to achieve economies of scale, increase market capacity, restricted access, access to target resources, reduce the market risk of new product development and cost, improve the speed of market expansion. But M & A is generally used to avoid excessive competition and achieve product differentiation method, and the strategic alliance mainly for learning and transfer of know-how to partner.
From a risk perspective, mergers and acquisitions and alliances have target selection risk, financial risk, integration and management risks. But compared with the acquisition, union does not involve the ownership, even relates to equity, often few in number or the creation of a separate legal entity, effectively cut off from the risk of infection. Therefore, has the outstanding advantages in investment and risk are high tech sector and business management ability is unknown.
4, feasibility
The legal aspects, the merger may result in market competition by reducing, by many strict "anti-monopoly law" regulation. The alliance has sometimes been accused of "conspiracy", may be subject to antitrust is examined and questioned, but compared with the acquisition, legal constraints are loose.
Finance, mergers generally requires a large capital investment, M & A should take into account many factors of capacity to pay, credit level, financial leverage, investment income and other comprehensive. The alliance mostly through the contract to achieve integration, does not involve a large amount of capital investment, financial analysis is relatively simple. Of course, if the union need to invest a lot of money, companies need a comprehensive analysis of the current and future investment ability from the aspects of investment, investment return, alliance partner.
Management, mergers and acquisitions and alliances to be successful, must consider strategic synergy, culture, organization, human resources etc.. M & A should focus on the goal of enterprise cooperation, debt levels, cultural differences and other content. Union should focus on the degree of trust, partnership between the early relationship, property right structure, strategic conflict and adaptability, cooperation etc..
In general, enterprise alliance has specialized, targeted, can join in several different coalitions, share the cost and risk, prudent management and other advantages, but there are opportunistic, leakage of technological secrets, easy disintegration, partners and competitors, partners between cost and income distribution is not uniform, enterprise control and independence affected by the risk. If the company has sufficient cash flow, and partners (potential) business activities of enterprise core business is very important, and the cooperation cost and risk increases, the merger and acquisition strategy.
Enterprise merger is to avoid excessive competition, enhance the synergy effect, to promote the rational allocation of resources, strong stability and other advantages, but also exists greater risk. For example, both resource sharing is difficult to achieve complementary lead to diseconomies of scale; financing improper influence the capital structure of the enterprise and financial leverage; the placement of workers burden increase management cost and operation cost; anti takeover strategies such as the implementation of target enterprises increased cost of acquisition. Information in the market, fierce competition, changeable external environment pressure industry, enterprise competition has a core competence, and the results of cooperation does not affect the core business, enterprise through the strategic alliance can use less initial investment into new markets or new technology.

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