When pursuing a vertical integration strategy, a firm gets involved in new portions of the value chain. This approach can be very attractive when a firm’s suppliers or buyers have too much power over the firm and are becoming increasingly profitable at the firm’s expense.
In today’s business world company has in place a strategic plan.
The strategic plan is formalized road map that defines how the organization implements the selected strategy.
A plan spells out where an organization is going over the next year or more and how it’s going to get there.
Having and working with the right strategic tools can give a clear picture of the opportunities available and dangers to prepare for.
A vertical marketing system (VMS) is one in which the main members of a distribution channel - producer, wholesaler, and retailer work together as a unified group in order to meet consumer needs.
Horizontal Marketing System is a merger of firms on the same level in order to pursue marketing opportunities.
By working together, companies can combine their capital, production capabilities, or marketing resources to accomplish more than any one company could alone.
How to beat the competition with smart market positioning
What is a competitive advantage? What is positioning? Cost leadership/ differentiation. How can you assess the competition?
When pursuing a vertical integration strategy, a firm gets involved in new portions of the value chain. This approach can be very attractive when a firm’s suppliers or buyers have too much power over the firm and are becoming increasingly profitable at the firm’s expense.
In today’s business world company has in place a strategic plan.
The strategic plan is formalized road map that defines how the organization implements the selected strategy.
A plan spells out where an organization is going over the next year or more and how it’s going to get there.
Having and working with the right strategic tools can give a clear picture of the opportunities available and dangers to prepare for.
A vertical marketing system (VMS) is one in which the main members of a distribution channel - producer, wholesaler, and retailer work together as a unified group in order to meet consumer needs.
Horizontal Marketing System is a merger of firms on the same level in order to pursue marketing opportunities.
By working together, companies can combine their capital, production capabilities, or marketing resources to accomplish more than any one company could alone.
How to beat the competition with smart market positioning
What is a competitive advantage? What is positioning? Cost leadership/ differentiation. How can you assess the competition?
Courses of action adopted by an organization for each of its businesses separately to serve identified CG and provide value to customers by satisfaction of their needs
Sustaining Competitive Strategy is also known as generic competitive strategy that is used in Business Level Strategy making. There are three types of sustaining competitive strategy: Cost leadership, differentiation and Focus Strategy. These strategy are used in different sub business unites (SBU).
michel portet Strategy ppt by Mudasir AliMudasir Ali
what is strategy by Michel Porter... Fit , leverage COMPETITIVE ADVANTAGE...Competitiveness ...strategic positionong..growth trap, strategic positioning and role of leadership...
When an organization adopts a strategy which requires taking of those activities which are unrelated to the existing businesses definition of one or more of its businesses either in terms of their respective customer groups, customer functions or alternative technologies, it is called conglomerate diversification.
Comunicazione digitale e social media marketing per fonire alle aziende gli strumenti per aumentare visibilità, notorietà del brand, reputazione, coinvolgimento degli utenti con l'obiettivo di accrescere le opportunità di business aziendale.
Courses of action adopted by an organization for each of its businesses separately to serve identified CG and provide value to customers by satisfaction of their needs
Sustaining Competitive Strategy is also known as generic competitive strategy that is used in Business Level Strategy making. There are three types of sustaining competitive strategy: Cost leadership, differentiation and Focus Strategy. These strategy are used in different sub business unites (SBU).
michel portet Strategy ppt by Mudasir AliMudasir Ali
what is strategy by Michel Porter... Fit , leverage COMPETITIVE ADVANTAGE...Competitiveness ...strategic positionong..growth trap, strategic positioning and role of leadership...
When an organization adopts a strategy which requires taking of those activities which are unrelated to the existing businesses definition of one or more of its businesses either in terms of their respective customer groups, customer functions or alternative technologies, it is called conglomerate diversification.
Comunicazione digitale e social media marketing per fonire alle aziende gli strumenti per aumentare visibilità, notorietà del brand, reputazione, coinvolgimento degli utenti con l'obiettivo di accrescere le opportunità di business aziendale.
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Corporate Strategy or Strategic Management
Concepts and Cases by Fred R. David,
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presentation on a merger and acquisition, a quick revision on the subject on M&A with an overview of it, with example to understand the concepts better
Strategic Management - Module 2 – MG University - Manu Melwin Joymanumelwin
Market penetration involves trying to gain additional share of a firm’s existing markets using existing products. Often firms will rely on advertising to attract new customers with existing markets.
Revisionstation: Edexcel GCSE Business 2.1.1 Business growth V2.pptxRevisionstation
Methods of business growth and their impact:
Internal (organic) growth: new products (innovation, research and development), new markets (through changing the marketing mix or taking advantage of technology and/or expanding overseas)
External (inorganic) growth: merger, takeover
The types of business ownership for growing businesses:
Public limited company (plc)
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External sources: loan capital, share capital including stock market flotation (public limited companies)
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Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
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The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
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RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
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Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
3. Firms can grow
internally by:
• By investing in more capital by
borrowing more money, raising more
funds from owners or by keeping some
of the profit back in business.
4. Firms can grow
externally by:
• Through INTEGRATIONINTEGRATION-when one firm
combines with another business.
• This can happen in any two ways:
• By a merger-a friendly deal where two
businesses join together (each business owns
a share of the other business for mutual
benefit or,
• By a takeover-a forced and sometimes
hostile deal where one firm buys a share of
the other business.
5. Integration can take
place in two directions-
• HORIZONTAL integration. This occurs
when firms in the same industry and at
the same stage of the production
process combine to form a larger
business.
• For example: a merger between two
banks - Westpac and Trustbank
=WestpacTrust
6. Advantages
• It reduces competition, thus increases market
share
• Increase in market power
• It has greater control on prices to make more
profit
• Gain new ideas from the other business
• As its scale of operations is greater, it may
experience economies of scale (decrease in
average costs=efficient use of resources=more
profit
• The new business may not need all of the workers.
They could remove some workers to become
efficient and make more profit
7. Disadvantages
For Firms
• The businesses may have different objectives
and targets
• It costs a lot of money to merge with or
takeover another business
• Communication problems
For Consumers
• They may have to pay higher prices due to
lack of competition
• Less choice
8. VERTICAL integration
• This occurs when a firm expands by
combining with an existing business in the
same industry but at a different stage of
the production process.
• This can be Backward or Forward
9. 1st Type
• Forward Vertical Integration - where a
firm buys into another in a later stage of
production.
• For example, a group of farmers buys
the local milk processing plant.
10. 2nd Type
• Backward Vertical Integration - where
a firm buys into another firm in an
earlier stage of production. For
example, when KFC buys the country’s
biggest poultry (chicken) processing
plant.
11. Why vertical
integration?
• Forward integration involves
integrating with customer
firms to ensure retail outlets
for products.
• Backward integration
involves integrating with a
“input” supplier to reduce
supply costs (or guarantee
their quality).
Frank Allen
Tyres
Dunlop
Rubber
plantation
14. Advantages of vertical
integration:
• It has the advantage of cutting costs by reducing the
profits, or reducing costs made at different stages of
production.
• It also controls the quality and delivery of materials
right through the production process.
•
• Increase entry barriers to potential competitors
• Increased control of the market.
• Better able to deal with any periods of shortage.
15. Disadvantages of vertical
integration
• Increase in costs e.g. May need to
appoint staff to run the business
• Inexperience in the field could prove
costly
• Possible diseconomies of scale that
may arise in terms of administration
• Decreased ability to increase product
variety
16. Diversification
Firms can also expand byFirms can also expand by
diversification.diversification. This involves take overThis involves take over
or merger with another firm in anor merger with another firm in an
unrelated industry.unrelated industry.
When a firm increases the range ofWhen a firm increases the range of
businesses it is involved in, it may developbusinesses it is involved in, it may develop
into an industrial combine, orinto an industrial combine, or
conglomerateconglomerate..
For example: MitsubishiFor example: Mitsubishi
17. Example
• A market gardener whose property is
next to a McDonalds car park. The
market gardener turns part of his
property into a mini-golf course to make
additional income from the crowds who
stop for takeaways.
18. Why Diversify?
Advantages
Firms diversify for a number of reasons:Firms diversify for a number of reasons:
To spread their risks. When sales in oneTo spread their risks. When sales in one
industry are depressed, other industriesindustry are depressed, other industries
provide more buoyant salesprovide more buoyant sales
To obtain other revenue sources, (so that itTo obtain other revenue sources, (so that it
is not dependent on one market).is not dependent on one market).
To increase the range of products they makeTo increase the range of products they make
or sell.or sell.
To develop into a conglomerate.To develop into a conglomerate.
Take advantage of existing expertise,Take advantage of existing expertise,
knowledge and resources in a company.knowledge and resources in a company.
19. Disadvantages
• May result in the slowing growth of its
core business.
• Adding management costs.
• Losses may incurred during the market
consolidation process.
• Complex dealings with the legal
requirements of different countries.
20. Your task 2
• Think of an example diversification
growth
• Draw this in your book
• Be creative……….
• I may actually award a prize for the
most original, but logical
21. Task 3 Identify the form of
business growth which is used in each
of these situations
1. A garage agrees to merge with another garage
2. A bicycle retailer decides to expand by buying a
shop in another town
3. A fruit juice firm buys a fruit farm
4. A business making electrical goods agrees to join
with retail shops specialising in electrical goods
5. A mining firm takes over a firm supplying mining
equipment
6. A construction company buys a holiday company