bm4_rpl

Please read and respond to the attachment(s).

Note: Only up to 20% of the written response content can be quotes from third parties.

Assignment Details:

· Please reply to the presented statement(s) below.

Deliverable Length: 250 words (minimum) per reply

ONE:

Vertical Integration 

The merging firms operates at different levels of value chain. Aims to strengthen the supply chain, it also results in reduction of cost and wastage. Vertical has a strategy that is useful to gain control over the industry. Vertical also helps a company with increasing entry barriers for new entrants, absorbing both the upstream and downstream profits and smoothening the supply chain. 

Example: Google’s acquisition of the smartphone producer Motorola in 2012. 

Horizontal Integration

The merging firms have same or similar operations activities in terms of product. This one aims to increase the size of the business. The results in elimination of competition and maximizes market share. The control is the strategy that helps in gaining control over the market.

Example: The merger of Marriott and Starwood Hotels in 2016.  

They both can be accomplished by internal expansion, merger, or acquisition.  

Horizontal vs Vertical Integration | Top 5 Differences (with infographics) (wallstreetmojo.com)

 

TWO:

My understanding of the Horizontal and vertical integration are two strategic ways by which companies use to merge companies or products to lead competitors. Horizontal integration can be summarized as a company taking over or buying out another company, but still operates independently a few examples could be Walmart and Sam’s club, Walmart selling more individualized items, while Sams club operated as the bulk/commercial sizes, Honda owning Acura, Facebook and Instagram, AT&T and Direct TV .  Like Horizontal integration Vertical integration can be summarized as a mother company owning another entity buy controls the production, sales and location/market type, when thinking about this the first company that come to mind is Nike and sir Jordan’s, although Jordan’s are representing an actual person and is owned   by him but produced my Nike the company Nike still makes the final say as to where and how it is sold.

I believe if a company has intentions to grow locally, nationally, or internationally diversification should be implemented to be a successful company during the growth states. Living here in Arkansas there are Walmart’s everywhere, this company has also expanded to Caribbean, Europe, Asia etc. the company originated in an all-white state where diversity had to be implemented to be successful in different parts of the world.

One benefit for global strategies for organizations is it reaches a larger market preferably overseas. A good example is great value products chips, etc, another could be Lays chips of all sorts. Although expanding your organization globally can be positively impactful it can also be a draw back for your success. Culturally, necessity. What may be a need here may not be of importance there.