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Corporate-Level Strategy: Horizontal Integration, and Strategic Outsourcing
Corporate-Level Strategy: Horizontal Integration, and Strategic Outsourcing
Corporate-Level Strategy and the Mulbusiness Model
Horizontal Integration: Single-Industry Corporate
Horizontal integration
Benefits of Horizontal Integration
Lower cost structure
Increased Product Differentiation
Product Bundling
Cross-selling
Leveraging a Competitive Advantage More Broadly
Increased bargaining power
Problems with Horizontal Integration
Vertical Integration: Entering new industries to strengthen the "core" business model
Increasing Profitability through vertical integration
Facilitating Investments in Specialized Assets
Holdup
Tapered integration
Enhancing Product Quality
Problems with Vertical Integration
Vertical desintegration
Increasing Cost Structure
Demand Unpredictabiility
Alternatives to vertical integration: cooperative relationships
Quasi integration
Short term contracts and competitive biding
Building Long-Term cooperative relationships
Hostage taking
Credible commitment
Maintaining Market Discipline
Parallel sourcing policy
Strategic Outsourcing
Virtual corporation
Benefits of Outsourcing
Lower cost structure
Enhanced Differentiation
Focus on the core business
Risks of Outsourcing
Holdup
Increased competition
Less of information
