Podcast
Questions and Answers
What are integrative growth strategies primarily focused on?
What are integrative growth strategies primarily focused on?
- Internal growth initiatives
- Developing new products
- Acquisition of competing businesses (correct)
- Enhancing customer service
Which type of integration involves acquiring another competing business?
Which type of integration involves acquiring another competing business?
- Backward integration
- Horizontal integration (correct)
- Vertical integration
- Forward integration
What is the primary purpose of backward integration?
What is the primary purpose of backward integration?
- To expand market presence
- To reduce the cost of resources needed for production (correct)
- To improve distribution channels
- To eliminate future competitors
Which of the following does NOT represent a type of integrative growth strategy?
Which of the following does NOT represent a type of integrative growth strategy?
What is an example of a company that used horizontal integration to expand its market share?
What is an example of a company that used horizontal integration to expand its market share?
How do global strategies contribute to modern business practices?
How do global strategies contribute to modern business practices?
Which model focuses on the assessment of business portfolio and resource allocation?
Which model focuses on the assessment of business portfolio and resource allocation?
What is the main difference between forward and backward integration?
What is the main difference between forward and backward integration?
What does forward integration in an organization entail?
What does forward integration in an organization entail?
What determines the classification of products in the Boston Consulting Group Model?
What determines the classification of products in the Boston Consulting Group Model?
In the BCG Model, what category do products with high market share and low market growth fall into?
In the BCG Model, what category do products with high market share and low market growth fall into?
Which category in the BCG Model represents products that are in a new market with high growth potential?
Which category in the BCG Model represents products that are in a new market with high growth potential?
What type of products does the BCG Model recommend minimizing or avoiding?
What type of products does the BCG Model recommend minimizing or avoiding?
What are the two parameters used in the General Electric Model to assess a strategic business unit?
What are the two parameters used in the General Electric Model to assess a strategic business unit?
Which statement best defines 'market share' in the context of the BCG Model?
Which statement best defines 'market share' in the context of the BCG Model?
What defines a 'star' in the BCG Model?
What defines a 'star' in the BCG Model?
What is the primary aim of horizontal integration?
What is the primary aim of horizontal integration?
What is the purpose of backward integration?
What is the purpose of backward integration?
What is an example of forward integration?
What is an example of forward integration?
How can vertical integration help an organization?
How can vertical integration help an organization?
Which of the following best describes forward integration?
Which of the following best describes forward integration?
What is a major benefit of effective backward integration?
What is a major benefit of effective backward integration?
Which growth strategy involves consolidating control over suppliers?
Which growth strategy involves consolidating control over suppliers?
In which scenario would an organization likely pursue vertical integration?
In which scenario would an organization likely pursue vertical integration?
What is primarily measured by the General Electric (GE) Model?
What is primarily measured by the General Electric (GE) Model?
In the GE Model, which cells indicate favorable positions for investment?
In the GE Model, which cells indicate favorable positions for investment?
What type of strategy is a company engaging in when it operates in multiple markets outside its home country?
What type of strategy is a company engaging in when it operates in multiple markets outside its home country?
Which of the following factors is considered an internal factor affecting business strength?
Which of the following factors is considered an internal factor affecting business strength?
What is a primary benefit of pursuing global strategies for companies?
What is a primary benefit of pursuing global strategies for companies?
Which cells in the GE Model signify positions where caution is advised for further investment?
Which cells in the GE Model signify positions where caution is advised for further investment?
Which strategy treats the global market as a single entity with slight local adjustments?
Which strategy treats the global market as a single entity with slight local adjustments?
What should a company consider if it is in Cells 7, 8, or 9 of the GE Model?
What should a company consider if it is in Cells 7, 8, or 9 of the GE Model?
Study Notes
Integrative Growth Strategies
- Invests resources in another company for growth, often acquisitions
- Types include horizontal & vertical integration
- Horizontal Acquires a competitor: eliminates competition, expands market reach, increases revenue (e.g., Jollibee buying Mang Inasal)
- Vertical Consolidate companies across the product lifecycle from raw materials to distribution, gains control over suppliers & distributors
- Backward: Buys a supplier to control supply chain, ensure reliable input & eliminate inefficiencies (e.g., Nokia buying phone case supplier)
- Forward: Buys a distributor to eliminate intermediaries, control marketing & improve sales (e.g., garment manufacturer buying retail outlets)
The Boston Consulting Group Model
- Analyzes Business Units based on market share & market growth
- Stars: High market share + high growth, likely to become cash cows
- Cash Cows: High market share + low growth, mature market with high profit margin
- Question Marks: Low market share + high growth, new products requiring promotional strategies
- Dogs: Low market share + low growth, minimize or avoid, expensive to maintain
The General Electric Model
- Improves upon the BCG Model, analyzes a Strategic Business Unit (SBU) based on Market Attractiveness & Business Strength
- Market Attractiveness (External Factors): Market size, growth, niche, demand, risk
- Business Strength (Internal Factors): Brand strength, staying power, profit margins, quality, customer patronage
- Uses a 3x3 Grid to classify SBUs:
- Cells 1-3: Favorable, attractive growth opportunities
- Cells 4-6: Medium attractiveness, cautious investment
- Cells 7-9: Unattractive, consider divesting
Global Strategies
- Expand business globally, focus on international, multinational, and global strategies
- International: Sell excess products outside home market, focus on home market
- Multinational: Operate in several countries outside the home market, tailor products and services to local demands
- Global: Treat the world as one market with minor local variations, focus on economies of scale and global branding
Benefits of Global Strategies
- Larger market, higher sales and earnings
- Global branding and recognition
- Economies of scale - lower costs, higher profit margins
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Description
Explore the concepts of integrative growth strategies, including horizontal and vertical integrations, along with practical examples of business acquisitions. Additionally, learn about the Boston Consulting Group Model, analyzing business units based on their market share and growth potential.
