StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Vertical and horizontal integration strategy - Assignment Example

Comments (0) Cite this document
Summary
This strategy of vertical integration involves the control of company of the entire production cycle of their product (which in this…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.2% of users find it useful
Vertical and horizontal integration strategy
Read TextPreview

Extract of sample "Vertical and horizontal integration strategy"

Teacher Ford Vertical and Horizontal Strategy Traditionally, Ford’s corporate strategy has been vertical integration with Henry Fordhimself stockpiling parts and materials for production. This strategy of vertical integration involves the control of company of the entire production cycle of their product (which in this case, automobile) from acquisition of supplies, production to distribution. This was done by Ford Company in the 1920s when Henry Ford bought coal and iron mines, timberlands, rubber plantations, a railroad, freighters, sawmills, blast furnaces, a glassworks (Vossoughi, 2012). At the end of this integration is the factory plant at River Rouge, Michigan where all these parts are assembled to become an automobile that will be later distributed in the market and sold. For a time, this strategy became very effective and contributed to Ford’s success.
This strategy of vertical integration however eventually became obsolete as supply chain became complex and competition became stiffer. The introduction of new supply chain and inventory control such as Toyota’s Just-in-Time rendered vertical integration out of fashion. The recent recessions also exposed the vulnerability of vertical integration to economic and cyclical downturns.
Thus, the strategy evolved to horizontal integration which is more appropriate for its global market. Horizontal integration as a strategy involves the acquisition of the production whose products are the same – either complementary or competitive (www.theeconomist.com, 2009). The classic example of this strategy is buying competitors who sell the same product. In the case of Ford this is the acquisition of Lincoln, Mercury, Mazda, Jaguar, Land rover, Volvo and Aston Martin which was sold as an option of the company’s restructuring.
References
“Moving on up." The Economist. The Economist Newspaper, 27 Mar. 2009. Web. 10 May 2014. .
Copy & Paste | Parenthetica
Vossoughi, Sohrab. "Todays Best Companies are Horizontally Integrated."Harvard Business Review. N.p., 14 Dec. 2012. Web. 10 May 2014. . Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Vertical and horizontal integration strategy Assignment”, n.d.)
Vertical and horizontal integration strategy Assignment. Retrieved from https://studentshare.org/management/1645842-vertical-and-horizontal-integration-strategy
(Vertical and Horizontal Integration Strategy Assignment)
Vertical and Horizontal Integration Strategy Assignment. https://studentshare.org/management/1645842-vertical-and-horizontal-integration-strategy.
“Vertical and Horizontal Integration Strategy Assignment”, n.d. https://studentshare.org/management/1645842-vertical-and-horizontal-integration-strategy.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Vertical and horizontal integration strategy

Advantages and Disadvantages of Vertical and Horizontal Integration

...company from the scratch. However, it is much more common for businesses in the 21st century to expand by means of acquiring other established business entities (Sullivan, 2008). There are two strategies that can be pursued in expanding one’s businesses through acquisitions and mergers (Hill & Jones, 2010). The first is through horizontal integration and the second is through vertical integration. Each of these strategies has distinct features and structures which enable businesses, including technology based businesses to attain some or all of the five requirements of business growth and expansion. Horizontal...
11 Pages(2750 words)Essay

Horizontal Integration

...above, implementing a horizontal strategy would be painstaking. Unlike Unilever, a corporate conglomerate, a pure horizontal integration would involve two separate brands, with their own set of values, practices, marketing techniques. Either brand may have to lose its identity to the either one. Or a whole new separate brand might be the outcome of the merger. In most cases, it is the one alpha brand which prevails and the business has to lose on the market which the other brand was targeting. The idea of expanding the market size through horizontal integration might not work altogether. In contrast to this, vertical...
9 Pages(2250 words)Coursework

Vertical and Horizontal Integration

...? Vertical and horizontal integration Task: Vertical and horizontal integration Introduction Companies, especially in the technology industry, are continuously reorganizing and restructuring. This is in order to keep their relevance in a field that HP’s CEO cites as ruthless (Idea 2011). The technology industry has continuous consumer shifts, new inventions, and these present risks for redundancy. Companies that manufacture hardware in previous years are now acquiring the production of software. Companies that only dealt with software are acquiring hardware production facilities in a bid to stay afloat; this occurred in the case of HP and...
10 Pages(2500 words)Essay

Portfolio AT&T Horizontal and Vertical Analysis

...? The total revenues of AT&T during fiscal year were $94,220 million. The firm’s revenues increase by in comparison with the previous year. AT&T’s operating expenses in 2012 went down by $111 million. The vertical analysis illustrated that in comparison to its sales operating expenses are 80% in 2012. During 2012 the net income of AT&T was $11,318 million. It’s net income increased by 5% during 2012. The net margin of a company shows the profitability of the business (Besley & Brigham, 2000). The net margin of a company is calculated dividing net income by total sales. AT&T had a net margin of 11.93%. In comparison with the industry average net margin of 7.8% the firm’s net margin is 4.03% higher (Dun & Bradstreet, 2012)....
4 Pages(1000 words)Essay

Memoir of James Braddock

5 Pages(1250 words)Admission/Application Essay

A vertical integration strategy and a corporate diversification strategy

...Chapter 6: Vertical Integration A vertical integration strategy is one way of increasing the value created by the firm by bringing within the firm's boundaries several stages of an industry's value chain. Integration may be forward if the firm becomes closer to its customers, e.g., the firm establishes its own dealerships to sell products, or backward if the firm gets closer to its raw material sources, e.g. by having its own mining company to supply steel materials. Integration may also vary in degree depending on the number of stages in the value chain over which it decides to exercise greater control. ...
2 Pages(500 words)Essay

Ford vertical integration 2013

...Strategic Management: Vertical Integration The Chief Executive of Telsa Motors Inc Elon Musk recently announced a plan by the giant electric automakers to erect its own a lithium-ion battery factory. The plan to build what is termed as “giga factory” is an ambitious project that the company plans to undertake in order to meet its projected high volume production of “Generation III” electric cars (White, 2013). The highly sophisticated automobiles are expected to hit the market by around 2017 and according to the company’s head, the world currently does not have the capacity to meet the high demand for lithium-ion battery which is one of the key raw materials required in the production of its automobiles....
1 Pages(250 words)Article

Vertical Boundaries Of the firm - Vertical Chain and Vertical Integration

.... However, the more the company is sure of its production levels, the better it will perform in strategy building. Production and workflow will be in the direction of market popularity. Production and Supplies: The most crucial determiner of success in a vertical chain is the production and supplies section. There have been many cases of foolproof economic plans failing only because the production units could not synchronize with the plans owing to last minute difficulties. Therefore, in case of Triond Furnitures expansion plan, determining production centers will be the turning point in designing, determining and delivering a good economic plan. Triond Furnitures can propose an approach wherein they...
5 Pages(1250 words)Essay

Vertical and Horizontal Mergers in Apparel Industry

...Vertical and Horizontal Mergers in Apparel Industry A merger is a company that is formed when two or more companies come together to form a single company. These companies that come together to form a single company may be dealing in the same line of products or different lines of products, but with a common finished product. If they deal in a similar line of product, a horizontal merger is formed. If they deal in different line of products but with a common finished product, a vertical merger is formed. In the illustrations below, the paper shall focus on vertical merger and a horizontal merger in the apparel industry. To begin with a...
2 Pages(500 words)Essay

Supply Chain Management, Vertical Integration and Horizontal Integration of Business Structure

...Supply Chain Management, Vertical Integration And Horizontal Integration Of Business Structure Table of Contents Table of Contents 1 Supply chain management 3 Vertical integration 5 Horizontal Integration 8 Comparison and contrast of Supply Chain Strategy 10 Conclusion 13 Bibliography 15 Introduction Supply chain management is a business management activity or process that is used to optimize the company productivities and inner expenses. Supply chain management is a significant tactical function proficient in fundamentally civilizing client worth methods through the re-engineering...
10 Pages(2500 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Vertical and horizontal integration strategy for FREE!

Contact Us