According to Dyer et al. (2004) “most acquisitions and alliances fail”. What criteria should managers use to determine whether to enter into an alliance with or acquire another firm and how can they increase the chances of success when following either strategy? In today’s globalised world companies find it increasingly hard to achieve and sustain growth, many look to develop better competencies and grow resources through the use of acquisitions and alliances. However, these are far from simple strategies to implement, they are multi-factorial with both tangible and intangible elements creating many conundrums. As identified by Holzner (2014) their ‘failure’ or ‘success’ are subjective terms, and are often misappropriated in this context. Success or failure may not be determined by the longevity of a union, financial gains or the eventual occurrence of termination. This essay will examine success as defined by the extent to which the relationship meets the prior entry needs and desires of the parties. It will evaluate assessment frameworks and models of how firms might identify and increase the chance of success, and will highlight managerial techniques.

Acquisitions and alliances are different undertakings, and as such carry with them specific concerns and peculiarities. It is wrong to address the success factors for both concepts as if they are a homogenous group – though there will be areas of crossover.

Success can only be realised by parties within a union if both have a clear understanding of what their objectives are, and have considered the use of mutual benchmarks that can determine the extent to which this has been achieved. This means managers not only need to know about the partner's business, they also need understanding of their own company (Holzner, 2014). Thus, when addressing how a company might effectively seek out and manage a