Competing in the global arina - Essay Example

Vertical integration is brought about in any business by increasing or decreasing the control a firm has over its inputs and distribution of outputs and services. This would include both backward and forward integration. Backward integration is the control over inputs or supplies, whereas, forward integration is the firm’s control over its outputs or supplies. Full vertical integration occurs when a firm incorporates a value-chain of a supplier and/or that of a distribution channel into its own value chain.

2 This could happen in two ways: when a firm expands its activities directly in other countries or through acquisition of existing companies in these countries. Horizontal integration involves expansion of the business at the same level of the value chain.This could be done through acquisitions or expansions into related or unrelated products, but at the same level of the value-chain. To launch a new product, ample research must have been carried out to determine the suitability of the product in the new market.

If only there is a demand for a product, it should be launched in the new country/market. To launch a new product, the market/consumer population must be ready for its launch. The consumer should be aware of the benefits of the product and must be ready to experiment with the new product/service. To be able to successfully launch a new product in a foreign country, the company should have core competencies in manufacturing the product. A product will be accepted in a foreign market, if and only if it is better than the existing products available in that market/country.

The manufacturer should make sure that his products/services are the best in the country and there is no competition. This might require integration in some form: either vertical or horizontal; to ensure the competitiveness of the products. Decisions regarding the time of launch of product and pricing would have to be carefully worked