Integration Strategy
Here's my summary of integration strategies:
1.
VERTICAL INTEGRATION:
1A. Forward (Vertical) integration:
= Seeking ownership or increased control over distributors or retailers.
Forward integration involves gaining ownership or increased control over distributors or retailers.
You can gain ownership or control over the distributors or retailers using forward integration.
1B. Backward (Vertical) Integration:
= Seeking ownership or increased control over a firm’s suppliers.
Both manufacturers and retailers purchase needed materials from suppliers. Backward integration is a strategy of seeking ownership or increased control of a firm's suppliers. This strategy can be especially appropriate when a firm's current suppliers are unreliable, too costly, or cannot meet the firm's needs.
2.
HORIZONTAL INTEGRATION:
= Seeking ownership or increased control over a firm's competitors.
Horizontal integration refers to a strategy of seeking ownership of or increased control over a firm's competitors. One of the most significant trends in strategic management today is the increased use of horizontal integration as a growth strategy. Mergers, acquisitions, and takeovers among competitors.
Allows for increased economies of scale and enhanced transfer of resources and competencies.