- 14 Marks
Question
i) Discuss the issues that should be considered when responding to proposals for a strategic alliance between Ghanalux and Sunlit Hotels.
(7 marks)
ii) Discuss the issues that should be considered when responding to proposals for a business combination with the tour company in Kumasi.
(7 marks)
Answer
i)
- Sunlit Hotels is much larger than Ghanalux, suggesting that it could dominate the partnership. The alliance may benefit Sunlit Hotels more by filling its empty rooms rather than significantly expanding Ghanalux’s business.
- Ghanalux might secure lower hotel rates through this partnership, but the alliance is unlikely to help Ghanalux grow substantially. A trading agreement might be more realistic than a full strategic alliance.
ii)
- The Kumasi tour company operates in a different market segment, serving tourists from France and Germany. This provides an opportunity for Ghanalux to diversify its customer base.
- However, Ghanalux might face challenges in integrating the two businesses due to potential cultural and operational differences. Due diligence is crucial to ensure a smooth merger.
- Tags: Acquisition, Business combination, Kumasi tour company, Merger, Partnership, Strategic Alliance, Sunlit Hotels, Tourism
- Level: Level 3
- Topic: Methods of Development
- Series: NOV 2019
- Uploader: Dotse