Horizontal Vs Vertical Integration

When searching for research to analyze and write about, I leaned more towards marketing and sales, which I want to ultimately work in. When I came across this article “Moving close to the customers: effects of vertical integration in the Swedish commercial printing industry”, I was interested in what vertical integration was and what it meant. I also was caught by the fact this was published using Swedish commercial printing. In this day and age, our country is becoming more and more globalized, and relies on other countries services and goods. I always find it interesting what other countries are doing in terms of business and maybe industries in America can learn from what they have implemented.

Vertical and Horizontal Integration of Health Systems in Various Regions In the 1900s and early 2000s, the United States started the integration movement to improve the efficiency and effectiveness of the health care delivery system. The integrations system was designed to introduce various strategies that healthcare organizations use to achieve the diversification in their services. However, these policies have helped the health care system to gain market share, become more diversified, reduce competition, and increase cost advantages by using existing operation to offer new products or services (Shi & Singh, 2015).

Growing through integration is concerned with mergers and takeovers of businesses. There are a number of different ways of integrating: Horizontal (same industry, same stage of production), backward vertical (same industry towards a supplier), forward vertical (same industry towards the customer) and Conglomerate (different industries).

The previous arrangement followed by Marks and Spencer demonstrates the concept of hierarchical structure, however in the last five years, due to a rise in their competitors within in the retail industry in the UK, their strategies have now become more focused on innovation and customer service’s quality. Therefore, their tall structure was redefined to adapt to these changes.

• DePamphilis D. (2008). Mergers, Acquisitions, and Other Restructuring Activities. New York: Elsevier, Academic Press • Paulson E. (2001). “Inside Cisco: The real story of sustained M&A growth”, John Wiley & Sons, Inc.

activities. The industry is already vertically integrated to some extent. They also deal with similar suppliers

Drexel LeBow College of Business FIN 640 – Mergers and Acquisitions Case Study: Martin Marietta – Vulcan Merger Presented by: Dharmesh Bharathan Andrew Hall Luis Hernandez Aziz Khan Teng Zhang Executive Summary This case study examines the proposed merger of Vulcan Materials and Martin Marietta both providers of construction aggregates. A stock-for-stock merger had the potential of making the company a global leader in construction materials, but was marred by disagreements over executive succession, location of new headquarters and the stock exchange proposed by Martin Marietta. Furthermore, as negotiations deteriorated Martin Marietta attempted a hostile takeover of Vulcan and also tried to get its directors appointed to

Industry Consolidation Risks (bargaining power) | Decreased bargaining power, price wars, inflated discounts, limited space within retailers |

FIGURE 1.2 [pic] What driving forces do you see at work in this industry? Are they likely to impact the industry’s competitive structure favorably or unfavorably? (Did we answer this question?)

Coming out of the first year of the merger, what new opportunities should the new “Defining Entity” pursue in order to grow business?

As mentioned previously about corporate strategy focuses on the alternatives of entities in which the organisation will challenge and maintain those organisations and other corporate level assets (Enz, 2010). The corporate level consists of three expansive accesses for example, the concentration, vertical integration, and diversification, which divides into two extensive categories, related and unrelated. Therefore, these strategies exhibit their strengths and weaknesses of the organisation. In addition, Concentration strategy authorise an organisation to concentrate on a particular business, however, this shows disadvantage to the firm as it relies on that one corporation for survival. Whereas, Vertical integration is a strategy that engages the firm becoming its individual supplier therefore, it is less profitable as it minimise strategic adaptability.

Force 2 - Bargaining Power of Buyers (customers): Companies in the retail industry operate in a high price elasticity environment as there is not much product differentiation to leverage. Buyers face almost no switching cost if they chose a substitute offering better value. On the contrary, large and diverse population making small purchases works in favor of the industry. No one individual or a small group has the power to significantly impact the industry, but overall buyers enjoy have a high bargaining power in the industry.

The 2016 Outlook for Automotive M&A The easy-money policy of the Federal Reserve and the cash-swollen balance sheets of corporations and private equity firms alike contributed to an explosion of deal-making in 2015. Long term growth in vehicle production and the positive outlook for vehicle sales over the next five years have made automotive one of the leading sectors for M&A. We expect deal activity in the automotive sector to remain strong during 2016, but to taper off from 2015 levels. The biggest factor that will suppress deal activity this year is the impending interest rate increase by the Federal Reserve. Other deal-squelching factors include geopolitical instability (e.g., in the Middle East and Russia) and the relative scarcity of companies that can be purchased at bargain prices.

Supply Chain Trends in the Retail Industry The global supply chain in the retail industry has witnessed changes and shifts which have led to opportunities and challenges for the involved players. This has occasioned shifts in trade and consumer behavior patterns. Among these are global growth patterns brought about by explosion of more cities and thus growth in infrastructure. There have been flexible supply chain trends which have enabled retail operators to adapt effectively to unexpected circumstances and changes. Moreover, globalization has changed the way retail supply chain is managed as more mature markets emerge to provide logistic and standard solution needs of the businesses. Conversely, near-shoring has

1. What can any retailer learn from this case? According to this case, and concerning about the strategy that Best Buy has created, retailers can similarly create a retailer-led product strategy to leverage their customer knowledge for product differentiation and to understand what the needs of the customers are; they must discover