What best describes the purpose of bolt-on acquisitions?

The purpose of bolt-on acquisitions is primarily to expand existing market share. This strategic move allows a company to quickly increase its footprint in its current market by acquiring complementary businesses that enhance its capabilities, customer base, or geographical reach. By integrating smaller, focused companies, the acquirer can bolster its market position, leverage synergies, and drive additional revenue without the time and resource investment required for organic growth.

Focusing on market share expansion, bolt-on acquisitions can also reduce costs and improve operational efficiencies through economies of scale. Furthermore, by acquiring firms that already have established customer relationships, a company can more rapidly grow its client base and enhance its competitive stance in the market.

In contrast, the other options do not accurately reflect the primary goal of this acquisition strategy. Creating new markets typically involves innovative approaches beyond acquiring existing businesses. Reducing competition can be a side effect of mergers and acquisitions, but it’s not the central goal of bolt-ons, which often focus on collaborative growth rather than elimination. Innovating product lines while a possible outcome, is not the direct purpose of these acquisitions—bolt-ons are more about enhancing what already exists rather than creating new products or services.