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Pre-designed Strategies - Coggle Diagram

- - - - Internalizes multiple stages of the value chain.
      - Types:
      - Backward: Controls suppliers (e.g., egg boxes for egg producers).
      - Forward: Controls distribution/customers (e.g., Coca-Cola bottling).
      - Total: Full control of the chain (e.g., IBM and its processors).
      - Partial: Some activities outsourced (e.g., Pemex buys oil).
      - Goal: Reduce transaction costs, increase control, efficiency, and protect unique competencies.
    - - Typologies:
      - Long-term contracts (formal).
      - Informal partnerships.
      - Franchises.
      - Pros:
      - Higher competitiveness (e.g., Apple, Zara).
      - Quality control and speed in delivery.
    - - Cons:
      - High capital investment.
      - Reduces flexibility.
      - Difficult to scale if small.
      - Requires drastic capability shifts.
  - - - Expands reach in the same industry, across different markets.
      - Achieved via:
      - Mergers: New unified entity, new name and structure.
      - Acquisitions: Company absorbs another but both identities remain.
    - - Goals:
      - Increase scale and market share.
      - Geographic expansion.
      - Enter new product categories.
      - Access technologies and capabilities quickly.
      - Examples:
      - Zara: Massimo Dutti vs. Bershka (same industry, different market segments).
      - Marissa: Different store formats/quality levels.
      - Gap: vs. Old Navy and Banana Republic.
- - - - Risks:
      - Distraction from core business.
      - Loss of strategic focus.
      - Management’s temptation to diversify for personal risk avoidance.
      - Important:
      - Only pursue if diversification strengthens, not weakens, the group.