Although acquisitions and alliances are used increasingly to drive the growth in multinational activities, the success rates of both acquisitions and alliances continue to be considered low, both at home and abroad. How do companies make the choice between acquisitions and alliances as a mode of entry? How do they then approach the post-entry managerial challenges? And, most important, how do companies effectively learn to tackle these problems in a systematic way? The authors examine a variety of factors that might influence the entry choice, including feasibility, flexibility, information asymmetry, digestibility, time horizon, focus on core vs. periphery, and post-agreement hazards. They also explore distinctive post-entry competencies that affect the success of both alliances and acquisitions: an integration capability for the former dimension and relational capability for the latter. The authors stress the strategic value of deliberate investments in assessing and improving one's own capability levels in the management of these entry tools. For example, spending time on understanding one's own organization's less tangible qualities, such as its cognitive and cultural traits, needs to become part of the standard due diligence process. To achieve positive outcomes, the authors say, managers should invest in knowledge management mechanisms that can first identify, and then articulate and codify the processes idiosyncratic to their firms that produce positive results. These processes, along with skilled managers, constitute the competencies needed to achieve success more consistently in these external modes of globalization.