Strategic Management Class
Forward Integration: gaining increased control over distributors, backward integration- seeking ownership over suppliers
Forward integration is when the manufacturer will acquire the channels of production and output to achieve greater economies of scale. These conditions are implemented when there are higher levels of trade and competition among firms. The way the strategy is organized is to look at the channels of production and output. Then, introduce ways to reduce costs and increase productivity. This was successful in helping to implement transformations in their operating structure. (Witcher, 2010) (Haines, 1998) (Daft, 2010)
Horizontal integration-seeking ownership/control over competitors
Horizontal integration is when a corporation will seek out control over competitors by making them into subsidiaries. The conditions that led to these changes were increased amounts of competition inside the marketplace. The basic steps that were used to organize this strategy requires: finding targeted firms, making an offer and quickly closing the transaction. These ideas have made corporations more successful by allowing them to understand changes inside the marketplace. (Witcher, 2010) (Haines, 1998) (Daft, 2010)
Market penetration-seeking to increase the market share for present products
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