This essay discusses the business integration strategies and the types of business strategies. Business strategy is a course of action to secure a competitive position in the market and improve overall performance. Providently, the components of business strategies include business objectives, core values, SWOT analysis, tactics, resource allocation plan, and measurement. Different organizations apply varying approaches. Therefore, the types of business strategies include market penetration, market expansion, product expansion, diversification, and acquisition. The strategies help to streamline operations and reduce overall overhead. Notably, vertical integration and horizontal integration are business strategies that companies use to consolidate their position among competitors. Vertical integration involves a company taking complete control over product production or distribution. Alternatively, horizontal business integration is a company’s acquisition or merger of a similar or competitive business.
TYPES AND ADVANTAGES OF BUSINESS INTEGRATION STRATEGIES
There are two types of business integration strategies. First, horizontal integration involves a company acquiring or merging with similar companies in the same industry it operates. Advantages include increased company size, product diversification, competition reduction, and higher economies of scale. Alternatively, vertical integration involves gaining ownership of a production/ distribution company in the same industry. Notably, the success of integration strategies relies on the components of business strategies. There are two types of vertical integration. Forward integration involves expanding business activities by gaining ownership of its distributor. Otherwise, backward integration involves the firm gaining ownership of its supplier. The advantage of vertical integration involves having control over quality and costs of a product manufacturing and distribution model. In conclusion, organizations should combine the types of business strategies with the integration approaches.
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THE COMPONENTS AND TYPES OF BUSINESS STRATEGIES
The components of business strategies include a clear definition of the business’ vision, objectives and core values. Secondly, SWOT analysis is the assessment of the strengths, weaknesses, opportunities, and threats affecting the business operations. Thirdly, tactics and resource allocation plan are strategies that ensure distribution of resources and job specifications. Lastly, measurement is the evaluation of performance as per set targets. Types of business strategies include market penetration to increase the market share of existing products within the same market. Secondly, market expansion entails selling current products in a new market. Thirdly, product development involves expanding a product line or adding new features to increase its sales and profits. Lastly, diversification constitutes selling new products to new markets. In conclusion, business integration strategies enable organizations to gain control over the value chain of their industry.
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