Pros and cons of acquisition versus organic development

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When firms diversify into a new industry, they are faced with acquiring new competencies to compete with firms already established in that industry. Verizon and AT&T are faced with the fact that smartphone market penetration may be reaching its limits in the U.S. In search for other growth areas, they have decided to tackle video media. They are taking advantage of the disruption to that industry as viewers move away from cable television. Each firm has chosen a different point of entry to the industry (satellite for AT&T and mobile video streaming for Verizon) and a different entry method (acquisition for AT&T and organic development for Verizon)

Discuss the competencies that each firm will need for this diversification and the pros and cons of acquisition versus organic development as a means to gain those competencies?

Reference no: EM133046640

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