strategic mgt

Risks of Horizontal Integration

Breach with antitrust laws, hard to manage

Risks of Vertical Integration

High Costs, Hard to adapt, Hard to adjust

Related Diversification

connected business

Synergies

companies merging and sharing

Alliance

Partnerships for a goal

Joint Ventures

New Entity - combining companies

Benefits of Joint Ventures/Alliances

Shared costs, shared risks, new markets

Risks of Joint Venture/Alliances

Loss of Knowledge

unrelated diversification

not connected business

Merger

Two companies combine as one

Acquisition

One company buys another

horizontal integration

how many different products or services a company offers in the same market

Benefits horizontal integration

lowers costs, less competition, more power

vertical integration

how much a product production process controls

benefits of vertical integration

more control, improves scheduling, protects product quality

risks of diversification

too complex, wrong reasons

forward vertical integration

selling/distribution- consumers

backward vertical integration

raw materials- source