Inorganic Growth And Vertical Integration

Improved Essays
A company can grow in two different way, through organic growth and through inorganic growth.
Inorganic growth is can help a company grow by joining two or more business together. There are two different ways of accomplishing this, mergers and takeovers. Mergers occur “when two firms join by agreement” making it possible to “share the resources of the two organisations and focus on the best activities of each” (Growing a company by international acquisition, n.d.). A takeover is form of acquisition, it occurs when a company buys a minimum of 51% of the shares of another company, enabling it to control (and own) the other business and choose which parts of the acquired business to keep or get rid of ” (Growing a company by international acquisition, n.d.). Within inorganic growth there are also two ways to integrate the companies, vertical and horizontal integration. Vertical integration joins businesses which are at
…show more content…
There are linguistic differences, cultural differences as well as a different currency, to contend with. Language differences can lead to confusion. Behaviour and business practices, as well as laws and regulations, can differ between the UK and the EU markets, therefore is why to be informed of these differences and to respect them. Conversions between the Pound and the Euro can also make business more differences due to fluctuations in the values which can affect profits. All of these reasons could have lead the Davis Service Group to embark on the acquisition of Berendsen through horizontal growth. Berendsen was already well established in the EU markets, had navigated issues of culture and language, and the countries in which Berendsen operated already used the Euro or had currencies linked to the Euro. All of this put the Davis Service Group into a much more favourable position than if it had entered the EU markets on its

Related Documents

  • Improved Essays

    Natureview Farm, an organic yogurt manufacturer from Cabot, Vermot found itself in a difficult situation because the venture capital that funds its strategic investments needed to cash of its investment in the company, and in order to attract another investor or position itself for acquisition, the company wanted to increase their revenues by 50% by the end of the next year (2001). In order to achieve this increase in revenue, the small natural yogurts company would need to grow their sales from $13 million to $20 million by the end of next year. Natureview yogurt was founded in 1989, and its key value was flavor and texture developed from a family recipe created by the company’s founder. It was made of milk from cows untreated with artificial…

    • 964 Words
    • 4 Pages
    Improved Essays
  • Decent Essays

    As the company is growing, it may be necessary for Target Corporation to consider changing it organization structure to multidivisional or matrix that supports large organization. A hybrid organizational structure matches with growing Target Corporation having certain functions operated independently and delegated with decision-making authority, retain some of the current functional level structure. Target Corporation needs to differentiate its presence from growing online retailers leveraging its internal resource and capabilities such as strong technological and skilled resource to overcome mobile evolution and future new social media channels. The consumer wants convenient shopping experience and quickly in real-time, so Target Corporation…

    • 183 Words
    • 1 Pages
    Decent Essays
  • Improved Essays

    Trader Joe's Evolution

    • 893 Words
    • 4 Pages

    The Rise of Organics Nowadays, people are care about food safety and many markets like Safeway and Sprouts are selling organic products in their store. As USDA (United States Department of Agriculture) states, “Organic agriculture produces products using methods that preserve the environment and avoid most synthetic materials, such as pesticides and antibiotics” (“What is?” par. 2). It gives people the idea of the agriculture they planted does not use chemicals to kill the insects on the plant that are harmful to people’s body. In addition, if the livestock that people usually eat in meals want to qualify for organic, they should be feed with antibiotic forage every day.…

    • 893 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Why, and with what results did Andrew Carnegie use the technique of vertical integration in his business ventures? A. Plan of Investigation Between the late 1800s and early 1900s, Andrew Carnegie ruled the steel empire in The United States. Carnegie controlled the majority of the steel industry in the United States, more than any individual ever had before. Carnegie developed ways to produce steel in the masses and for a lower cost than usual, ultimately putting him at the top.…

    • 2022 Words
    • 9 Pages
    Improved Essays
  • Improved Essays

    Massive amounts of money and resources would be required to create the products and services that Britain would no longer be able to freely import from the EU; they would subsequently suffer from reduced efficiency and higher product cost and less attractive alternative products. Taking into consideration that 60% of British trade is with EU countries, and there are 700,000 British companies that frequently trade with other European countries across international borders, a disassociated Britain would be counterproductive to Britain’s economy and significantly increase the goods that have been become…

    • 1006 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Andrew Carnegie used the vertical integration to make his profit. He was a manufacturer of irons, steel in the planet. Carnegie invested in other establishments, where as instead of obtaining other retailers, he clearly acquired purveyors. In return, Carnegie was exchanged with a reduced amount of steel. He had the advantage to make earnings.…

    • 322 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    Shi & Singh (2015) states integration refers to the health care organizations strategies in order to achieve economies success in operation, diversify exiting operations with new products, and services. Integration in healthcare grew from the need for alternative delivery services for medical care and the growth of innovative technology and managed care (p. 361). According to Shi & Singh (2015), the two major service strategies for integration health care are horizontal integration and vertical integration. Horizontal integration involves expanding its product and service through acquiring possession of developing or existing health services.…

    • 351 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    As previously mentioned, communication is key. Communicating strategies with the employees, stockholders, customers, and suppliers of both organizations are both necessary and vital. However, not every risk of a merger is from the internal factors; external factor play a big role as well: decline in the economy, or the invasion of a new player in a market. Nonetheless, the world of business moves fast these days, with rapid changes in technology,…

    • 1710 Words
    • 7 Pages
    Improved Essays
  • Decent Essays

    In the Thermofisher talk by Jennifer Deluce one of the aspects of her talk that was particularly interesting was the fact that even though Thermofisher is a biotechnological company it also relies on some of business aspects to stay afloat. From an academic perspective competition is always out there and they can take away how much potential revenue you make. According to the presentation Deluce’s stats state that Thermofisher makes 18 billion in revenue which allows them to do all sorts of stuff like research and development and hire over fifty five thousand employees which helps the company find better tools to research and develop new tools. They us over 700 million of dollars on research which is important for Thermofisher is important because it allows for them to create new and better technology. One of the types of technology that she had was a pipette.…

    • 506 Words
    • 3 Pages
    Decent Essays
  • Improved Essays

    Vertically integration, can be an important strategy, but often times it is difficult to implement successfully. Furthermore, if the company decides that the integration was the wrong strategy for the company, it can be very expensive to fix. According to Stuckey & White (1993), “vertical integration typically reduces some risks and transaction costs, but it requires heavy setup costs, and its coordination effectiveness is often dubious. However, a vertical market "fails" when transactions within it were too risky and the contracts designed to overcome these risks are too costly (or impossible) to write and administer” (p.3). Obviously, there are pros and cons with integration.…

    • 636 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Garlands explanation of ‘new experience’ is most likely the reason behind “The emergence of a ‘culture of control’” as described by Palmer wherein extreme measures are looked upon as “normal” to counter terrorism. He also talks about how community surveillance is creating a “culture of suspicion” (Palmer, 2011). Culture of a society is in a way directly responsible for the state’s policy on punishment. Often the various modes of punishment draw their sources from the culture of the society. David Garland calls “punishment a cultural artefact which embodies and expresses society’s cultural forms” (Garland, 1991).…

    • 962 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Horizontal integration is the process of acquiring similar companies within the same industry. An example of this would be Disney acquiring Marvel Entertainment for $4 billion in 2009. Marvel is also in the industry of creating characters; however, they were a different breed of characters, which were superheroes. This acquisition allowed Disney to expand its product lines into different market segments, expanding the reach of their company. Vertical integration is the process of acquiring a company that operates either before or after the acquiring company in the production process.…

    • 751 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    When the company improves its vision, coordination and control of the business, it creates value. That implies making tough decisions that need to be made; for example, reducing employees, or raising fares. Combination benefits. Both companies leveraged cash resources, which increased their purchasing and market power.…

    • 1745 Words
    • 7 Pages
    Great Essays
  • Great Essays

    Nike's Market Structure

    • 1452 Words
    • 6 Pages

    MARKET STRUCTURE Market structure is defined as the organizational and other characteristics of a market. The economist have focused on in describing the market structures are the nature of competition and the mode of pricing in that market as the major characteristics. Market structure also mean that the number of firms in the market that produce identical goods and services. The market structure has a great influence on the behaviour of individuals firms in the market and will affect how firm price their product in the history. They are four basic market structures which are perfect competition, monopolistic competition, monopoly and oligopoly.…

    • 1452 Words
    • 6 Pages
    Great Essays
  • Great Essays

    It was also aimed at eBay’s willingness to expand into the domain of online payments services. However the company PayPal remained an independent fully owned subsidiary of eBay but was independent in its operations and formulating strategy for its growth. . If we try putting all the information into the framework given below, we can easily see whether synergies were attainable or not. eBay did not have exert much of control over it other than Financial Controls with slight controls over its management In the framework given below degree of integration represents the type of control parent body has over the new one.…

    • 1797 Words
    • 8 Pages
    Great Essays