12 What is vertical integration In microeconomics and management vertical

12 what is vertical integration in microeconomics and

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12. What is vertical integration? In microeconomics and management, vertical integration is an arrangement in which the supply chain of a company is owned by that company. Usually each member of the supply chain produces a different product or service, and the products combine to satisfy a common need. 13. What is horizontal integration? Horizontal integration is the process of a company increasing production of goods or services at the same part of the supply chain. A company may do this via internal expansion, acquisition or merger. The process can lead to
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monopoly if a company captures the vast majority of the market for that product or service. 14. Undertake a SWOT analysis of McDonalds. Strengths: McDonald's has successfully rolled out new items like coffees, smoothies, and Angus burgers, expanding the range of menu choices. With a strong product offering, the company has grown income throughout the recession, notching strong increases in same-store sales. Operations are spread around the world, meaning the company is not exposed to just one currency or economy. Even trading near its highs, McDonald's serves up sizzling dividend yields that top the 10-year Treasury. The yield comes with a side order of annual dividend hikes dating back to 1976. The annual dividend payment has gone from 55 cents per share in 2005 to $2.20 this year. Weaknesses: It will be harder and harder to find prime locations to build a set of golden arches. The U.S. is saturated with its restaurants, so growth will have to occur internationally, posing potential cultural challenges. While the annual dividend hikes are likely to continue, the dividend growth rate has been slowing and will probably continue to slow or level off. Opportunities: There are opportunities for new restaurants outside the United States, and McDonald's has been taking advantage of them. China is a great opportunity for the company, as is much of Asia. Menu innovations are limited only by imagination. Low interest rates provide cheap capital for growth. In addition to dollar-denominated debt, McDonald's recently became the first foreign company to issue yuan-denominated bonds in Hong Kong. Threats: Governments are considering regulations targeting fast food. McDonald's faces competition from strong peers such as recent 11 O’clock Stock pick Yum! Brands and Burger King. New product rollouts often have to go head-to-head with established players like Starbucks coffee or Jamba smoothies . Commodity price increases could increase costs while a weak economy limits the ability to pass the price hikes through to consumers. 15. What are the 4 stages of the Product Life Cycle? Introduction - The introduction phase is the period where a new product is first introduced into the market. This typically requires a lot of resources and finances. As a result, many companies, start-ups especially, are practicing a new approach to product development known as The Lean Approach. The
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