Slides - Corporate Strategy - Synergy Approach

Slides - Corporate Strategy - Synergy Approach - Synergy...

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1 Synergy Approach htp:/www.pburch.net/Pictures/toys/synergy_bal.JPG Synergy Approach Outline s Integration Strategies s Diversification s Unrelated Diversification s Related Diversification s Mergers and Acquisitions Integration Strategies htp:/www.pastperfect.info/sites/woodhorn/images/lo/coaltruck.jpg Integration Horizontal - Description s The horizontal integration strategy is based on growth through the acquisition of firms operating in the same links of the industry value chain s Acquiring firms from the same link of the industry value chain can eliminate competitors while broadening product lines and gaining access to new geographical markets (e.g. Chrysler) s Warning! This strategy is limited by national regulations on the formation of monopolies Integration Horizontal - Acquisition Suppliers Manufacturers Distributors Customers ---------------------------- Industry Value Chain ---------------------------- Firm A Firm B Firm C Firm D Firm E Firm F Firm G Firm H Firm I Firm J Integration Horizontal - Acquisition Suppliers Manufacturers Distributors Customers ---------------------------- Industry Value Chain ---------------------------- Firm A Firm B Firm C Firm D Firm E Firm F Firm G Firm H Firm I Firm J Firm F buys Firms H, I, J
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2 Integration Horizontal - Acquisition Suppliers Manufacturers Distributors Customers ---------------------------- Industry Value Chain ---------------------------- Firm A Firm B Firm C Firm D Firm E Firm FHIJ Firm G Integration Vertical - Description s Vertical integration is when a firm’s strategy is to acquire firms that supply it with inputs (backward integration) or are customers for its outputs (forward integration) s Motivations for vertical integration s Desire to increase dependability of supplier especially when number of suppliers are small
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This note was uploaded on 04/12/2011 for the course MKT 352 taught by Professor Cowart during the Fall '11 term at Grand Valley State.

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Slides - Corporate Strategy - Synergy Approach - Synergy...

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