What does acquisition refer to in the context of portfolio strategy?

Acquisition, in the context of portfolio strategy, refers to the process by which a company purchases another company or a part of its assets in order to expand its market share, increase its product offerings, or improve its overall competitive position. This strategy can be utilized to quickly gain access to new markets, technologies, or customer bases without the lengthy process of developing these capabilities internally.

In corporate strategy, acquisitions can play a critical role in diversifying a portfolio, as they allow a company to enter into new industries or sectors while leveraging existing resources and capabilities. Successful acquisitions can lead to economies of scale, enhanced innovation through combined research and development efforts, and improved operational efficiencies derived from shared best practices.

The other choices in the question refer to different strategic actions. Divestiture represents the process of selling off a business unit or assets, which is not what acquisition entails. A demerger involves separating a division or subsidiary from the parent company to create a new independent entity, which again is not related to acquisition. Restructuring typically refers to reorganizing a company’s operations or finances to improve efficiency or address financial issues, rather than expanding through acquisition. Each of these strategies serves different objectives compared to acquisition, which focuses on growth and consolidation through the purchase of