Organizations use strategies to grow their businesses and to obtain an advantage over their competitors. Different organizations have different strategies that each employs, depending on the size and type of the business and their intended direction and scope over the long term.
It’s very important for companies or organizations to vertically integrate when costs of making the product inside the company are lower than the costs of buying that product in the market (Jurevicius, Vertical Integration, 2013).
There are different types of business strategies including:
• Integration strategies:
Integration strategies involve allowing firms to gain control over its distributors, suppliers and its competitors. Vertical Forward- and backward integration is also referred to as vertical integration strategies. Vertical integration is the combination, under a single ownership, of two or more stages of production or distribution that are usually separate (Buzzell, 1983). Vertical integration involves a variety decisions concerning whether corporations, through their business units, should provide certain goods or services in-house or purchase them from outsiders instead (Harrigan, 1985). Forward- and backward vertical …show more content…
Acquiring control over the operations and functioning of the competitors of the organizations is referred to horizontal integration strategy. Horizontal integration strategy can be used as a growth strategy by the organization in their strategic management. Through increasing number of acquisitions, mergers and takeovers the organization not only increases its resources but also obtains large economies of scale. In horizontal integration there is increased control over the functioning and operations of the competing organizations through purchasing and hostile takeover (Zkjadoon, 2016). Some guidelines that is useful when implementing horizontal integration
It’s very important for companies or organizations to vertically integrate when costs of making the product inside the company are lower than the costs of buying that product in the market (Jurevicius, Vertical Integration, 2013).
There are different types of business strategies including:
• Integration strategies:
Integration strategies involve allowing firms to gain control over its distributors, suppliers and its competitors. Vertical Forward- and backward integration is also referred to as vertical integration strategies. Vertical integration is the combination, under a single ownership, of two or more stages of production or distribution that are usually separate (Buzzell, 1983). Vertical integration involves a variety decisions concerning whether corporations, through their business units, should provide certain goods or services in-house or purchase them from outsiders instead (Harrigan, 1985). Forward- and backward vertical …show more content…
Acquiring control over the operations and functioning of the competitors of the organizations is referred to horizontal integration strategy. Horizontal integration strategy can be used as a growth strategy by the organization in their strategic management. Through increasing number of acquisitions, mergers and takeovers the organization not only increases its resources but also obtains large economies of scale. In horizontal integration there is increased control over the functioning and operations of the competing organizations through purchasing and hostile takeover (Zkjadoon, 2016). Some guidelines that is useful when implementing horizontal integration