M&A vs Strategic Alliances: Optimizing Growth Strategies Through Opportunity Cost Analysis

This study presents a comparative analysis of mergers and acquisitions (M&A) and strategic alliances as corporate growth strategies, focusing on their relative opportunity costs and long-term implications. We hypothesize that the optimal choice between these strategies is contingent upon specific organizational factors and market conditions. Our methodology involved a longitudinal study employing propensity score matching to compare outcomes of M&A versus alliance strategies. We developed a multi-factor decision model incorporating variables such as investment capacity, risk tolerance, and desired control level. Results indicate a statistically significant difference in long-term value creation between optimally and sub-optimally chosen strategies. The decision model demonstrated strong predictive power in determining the more suitable growth strategy. Additionally, we propose and validate a framework for alliance optimization, which significantly improved goal achievement rates.