Supply Chain and Bergerac

- Used business strategy called vertical integration, which a company would control every stage of industrial process, from mining the raw material to transporting to product.

Vertical integration is a concept in which a company develops or acquires production units for outputs which are

1. Please assess the economic benefits of acquiring the Vulcan Mold-Maker machine. What is the initial outlay? What are the benefits over time? What is an appropriate discount rate? Does the net present value(NPV) warrant the investment in the machine?

Vertical integration is when one firm joins with another at a different stage of the same production process. Forward Vertical is when the other firm is at a later stage and Backward Vertical is when the other firm is at an earlier stage. Vertical integration as a whole allows for a firm to control key stages of the production process; guarantees access to a market; and gains control of supplies. Companies such as Zara and American Apparel are vertically integrated, especially at key stages of

Vertical integration- a company controlled all parts of production from raw mats to the finished goods

Horizontal integration involves buying out other companies and taking over one single step of an industrial process. It establishes a monopoly because, with horizontal integration, everyone must go the company that has monopolized that step.

Vertical integration is a business growth strategy for economics of scale. It is typified by one firm engaged in different parts of production example; growing raw materials, manufacturing, transporting, marketing, and/or retailing to expand business in existing market for the firm. It can function in two directions both forward integration and backward integration.

When implementing project 1, you face technical and market risk. How would you assess the risks embedded in Project 1?

Starting of reading this article, I was completely lost and wanted to quit. Vertical integration seemed too big of a concept to wrap my head around and the article had so many stats and figures I was going crazy. After dissecting the article parts by part and figuring out what vertical integration meant, the research started to make sense. To start off what the research talks about lets define vertical integrated. According to Adelman, it states that “a firm is vertically integrated whenever it ‘transmits from one of its departments to another good or service which could, without major adaptation, be sold in the market.’”. Ultimately a company is vertically integrated when “firms integrates activities in the value chain to produce its own inputs and/or takes care of its own

Suppliers pose a credible threat of forward integration. Low -Medium. Its is possible of suppliers to integrate forward but there is no such mention in the case.

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

According to DSW Inc.’s March 2016 10K filing, “Our growth strategy is to continue to strengthen our position as a leading footwear and accessories retailer by: expanding into new markets with the right banners and store format, extending our customer reach through new categories, and acquiring new strengths to compete in ways and places that are relevant to the customer, such as our recent acquisition of Ebuys, Inc. We will also continue expanding our physical and digital presence in relevant markets through existing and new formats, investing in our infrastructure, and utilizing our financial strength to invest in key initiatives.” (DSW Inc.10-K filing, 2016) The use forward Integration to gaining control over retailers by opening more than 40 stores in 2015 and made changes to their website to be able to offer products in store and online taking control over other retail stores. (DSW Inc., 2016) The use backward integration to gaining control over suppliers by not agreeing to work with any supplier that does not have the same values. Each supplier is responsible to sign a code of ethic and follow the code or DSW will discontinue using the supplier. (DSW Inc., 2016) DSW Inc. uses horizontal integration to gaining control over competitors by offering low prices, convenience of a one stop shop for shoes instore or online, and they value from the loyalty program. (DSW Inc., 2016) The are using market penetration to seeking greater market

Richard Dana Associates (RDA) was brought in by the owners of a family-owned business with complex relationship issues at a time preceding an anticipated leadership transition. Following individual and group coaching sessions, RDA was able to help the leadership separate personal issues, and codify practices through formal policies to allow the leadership group to focus on business issues without personal complications. At the end of RDA's engagement, the client was well-positioned to begin developing a transition plan.

Since 2008, Bergerac had been exploring the opportunity to begin its own production of cartridge components. Plastic suppliers like GenieTech and Elsinore faced difficulties in responding to demand spikes, leading to production delays. Such supplier unreliability made it challenging for Bergerac to optimize its cartridge production. Thus, the company had to carry more inventory of parts and finished goods than Wyckoff could have liked. The obvious appeal to fully control the supply of plastic lead to a strategy, the company has to decide whether to buy or build this capability. GenieTech owner was interested in retirement and was willing to sell the company for a purchase price of $5.75 million. GenieTech has 8 molding presses each could produce 5 cartridges per cycle with a total capacity of 10,782,720 cartridges per year with 5 days production in a week. The other alternative is to build a unit with 4 molding presses which are more efficient than the presses at GenieTech. The total capacity of the unit will be 6,097,371cartridges per year with 5 days production in a week. It is required to predict the best long term decision among the buy and build options.

A company won’t integrate vertically its production if it against its business interest. There are some vertically