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Alternative Strategies

In: Business and Management

Submitted By inzatul91
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Alternative Strategies.
1.0 Integration Strategies.
Forward integrations, backward integrations, and horizontal integrations are sometimes collectively referred to as vertical integrations strategies. Vertical integrations strategies allow a firm to gain control over distributors, supplier and competitors. The degree to which a firm owns its upstream suppliers and its downstream buyers is referred to as vertical integration. Because it can have a significant impact on a business unit's position in its industry with respect to cost, differentiation, and other strategic issues, the vertical scope of the firm is an important consideration in corporate strategy. Expansion of activities downstream is referred to as forward integration, and expansion upstream is referred to as backward integration. The concept of vertical integration can be visualized using the value chain. Consider a firm whose products are made via an assembly process. Such a firm may consider backward integrating into intermediate manufacturing or forward integrating into distribution. Example Value Chain. 1.1 Forward Integration
Forward integration is a type of vertical merger (vertical integration) in which a supplier acquires a manufacturer or a manufacturer acquires a distributor. Businesses engage in forward integration either to generate a higher margin from a key input which it owns or produces or to better market its products and increase its profitability.
Forward integration is one of three types of vertical integration, which is a form of management control that involves companies in the same supply chain belonging to one owner. Forward, or downstream, vertical integration occurs when the company joins with or creates businesses whose role in the production of its goods occurs after its own; the…...

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