REPORT IN BUSINESS POLICY AND STRATEGY (MITCH)

Mustremaininnovativeinallvaluechainactivities

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Unformatted text preview: ts) smoother, more efficient operation Limits to Vertical Integration s s s Differences in minimum efficient scale in vertically integrated corporation. Must remain innovative in all Value Chain activities. Possible incompatibilities between managerial skills and corporate cultures that make upstream and downstream activities successful. Strategy Formulation: Corporate Strategy Strategy Formulation: Corporate Strategy Vertical and Horizontal Integration ­ Value Chain Activities Horizontal Integration s Coordinating across the same or similar value chain activities. Acquisition, Strategic Alliance, Internal Development Strategy Formulation: Corporate Strategy Strategy Formulation: Corporate Strategy Vertical and Horizontal Integration ­ Value Chain Activities Horizontal Integration Benefits: s s Corporate managers have expertise to recognize undervalued stocks that many individual investors would miss. Corporations have economies of scale for financing acquisitions that individuals do not. Horizontal Integration Costs: s s Conglomerate discount: value of stock of conglomerate sells for less than total value of individual stocks. Takeover premiums: corporations usually pay a premium over the normal trading price of the target...
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This note was uploaded on 10/03/2013 for the course ECON 312 taught by Professor None during the Spring '05 term at Amrita University.

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