To integrate means to join together. Business integration may be, in the form of a takeover or a merger. Later on it is divided into different types. A merger occurs when two businesses combine to form a single company and the existing shareholders still keep a part of the shares and join together with an agreement. A takeover is when a business takes control of another one often without any agreement. Integration may be done to gain access to a wider market, even in other countries, to acquire new technology and even to reduce competition. One type of integration is horizontal, and this occurs when more than one firm, (though normally two) join together at the same stage of production and work in the same industry so they can learn from one another. An example would be if Daimler-Benz and Chrysler joined together. Another type of integration is a vertical one; it can be forward (if the company being bought is at a higher stage or scale of the production process) or backwards (if the company being bought is at an earlier stage of the production process) but it all depends on the stages of production. An example of a backward vertical merger would be if Starbucks bought a coffee farm in china, and forward would be if the actual farm bought Starbucks. The third type would be conglomerate, is when a company buys a range of companies producing different products. They aren’t related internally to any specific type of industry, and this avoids the risk of not selling one type of product as if for example, people stop buying shoes as often, you still have the opportunity of selling the same number of toys and therefore this will help you to back-up any problem in one certain industry. The last type would be the lateral, this is when both the buyer and the bought company have similar products in terms of production but aren´t quite the same; e.g tea and coffee, but in practical terms; they could still sell coffee and tea at the same shop.
Integration is the act of combining or adding parts to make a unified whole. In business integration may be in the form of a takeover or a merger. A merger occurs when 2 business join together by agreement, it is similar to a takeover except that the existing shareholders retain a share in the new business. A takeover occurs when a business gains control of part of another business. Often this is done without agreement. Normally business integrate to increase sales, make more money, improves productivity… There are 5 main types of integration: Horizontal, Vertical, Lateral, Conglomerate and International integration. Horizontal integration is when firms join at the same stage of production because the different firms are involved in the same stage of production; horizontal integration allows them to share resources at that level. This can lead to an economy of scale where the bigger the better. Vertical integration is when 2 companies join and are in different stages of production, there are 2 types. Forward would mean taking a firm at a later stage of production e.g. a business with tea estates taking over a firm that processes tea. Backward would be taking a firm at an earlier stage of production. E.g .A firm that advertises and markets tea taking over a firm that processes tea. As you control 2 businesses at different stages of production you have more control over its supply chain
Lateral integration occurs when there is a merger of firms that use the same distribution channels. E.g. a company selling tea may join to a company selling coffee so that the good can be distributed together to supermarket chains Conglomerate integration is a process whereby a business acquires a substantial number of other unrelated businesses in order to form a large and highly diversified corporation. A very big advantage is diversification, where by acquiring firms in different markets, businesses are able to diversify away their risks. Finally international integration is when other companies buy other companies worldwide, this integration is a good way of entering to a new international market
Firms can grow big by internal or external growth. Integration is an external growth. This comes form the ability of the firm to join or buy another firm, it really means to join together, and in a business this can be done by a takeover or a merger. A takeover is when a business gains control over part of another business. This is done without an agreement, and can result in the business being broken down, and having parts of it being sold of. A merger, is when to business join together by an agreement. Two business join to form a simple company. There are five types of integration. It can be horizontal, vertical, lateral, conglomerate or international. When companies of the same stage of production join, this is called horizontal integration. They can learn from each other, and can concentrate on processing activities in the most efficient plants. Increasing the size of business, can provide economies of scales. Another type of integration is vertical integration. This is when companies of the same stage of production join. It can be forward (taking over a firm in a later stage of production), or backward(taking over a firm at an earlier stage of production). An advantage for this type of integration, is that they can gain control over the supply chain. There is also later integration. This is when firms of the same distribution channels join. An example would be, a company selling Tea joining with a company selling Coffee. When a company integrates with another company producing a different good, this is called conglomerate integration. Profits form already established business can be use to develop a new business area. Also, if for example a certain product’s demand decreases, the company would still be making profits, cause it has other product and areas in which to relay. Lastly there is international integration, this is when global companies such as Tata Tea, buy other companies worldwide. This type of integration is a good way of entering a new international market.
Business integrate for many reasons, they can do it to get access to a new market, even in other countries. They can also do it to acquire new technologies from other firm, were they my have more and better technologies. Some firms may also do it to reduce competitors, or to find new ways in which doing advertising cheaper and more efficient. Sometimes there is to much supply in the market and by buying a company in your same stage of production, it can be reduced. It can also be done to acquire dynamic products, to expand in the market share, or if one of the biggest companies in a market joins to another of the biggest companies, it can be done to monopolise the market.
Integration is to join together, it can take place either through a merger, when there is an agreement between the companies, or through a take over when a business takes control of another business by buying it.
There are five different types of integration. There is horizontal integration, when companies which are in the same stage of production join, which could provide economies of scale.
There is also vertical integration, which is a join between companies which can be in a earlier stage of production or in a later stage of production. An advantage of this type of integration is that the firm gains control over its supply chain.
However another typical type of integration is the lateral integration, when there is a merger of firms that use the same distribution channels, for example a company selling coffee mergers with a company tea, so that goods can be distributed together to supermarket chais.
Furthermore, a type of integration that many big companies, such as multinationals adopt is to become conglomerate, where a company buys a range of companies producing different products that are not related.
Finally the last type of integration is to become international, where global companies buy up other companies worldwide, this type of integration is a good way of entering a new international market.
But, WHY DO COMPANIES INTEGRATE?
Many companies integrate because there is too much supply, relative to the demand, and by integrating they will be able to gain more demand and gain control of the market supply. another reason for why companies may integrate is to access new markets in other countries, for example if a British company buys a chinese company, it will gain part of the chinese market and therefore profits. Moreover an important reason for why a company may integrate is to acquire new technologies and become more competitive. Lastly, they may integrate to acquire more dynamic products and be able to get and increase in demand.
To integrate means to join together. In business integration may be in the form of a takeover or a merger. A merger occurs when two businesses combine to form a single company. The existing shareholders retain a share in the new business, it is a join together by agreement. A takeover occurs when one business gains control or buys part of another business. It is often done without agreement.
There are 5 main types of integration ways in which companies can merge, one is horizontal integration, it is where firms join at the same stage of production . they can learn from best practice in each company and concentrate on processing activities in the most efficient plants. This increased size of the business provides economies of scale. Secondly vertical integration, this can a forward or a backward movement in the stage of production, forward would mean taking over a firm at a later stage in the production process. Backward would be taking over a form at an earlier stage of production. This short of integration is that the firm gains control over its supply chain. Starbucks is an example of vertical integration. Furthermore, another type of integration is lateral , occurs when there is a merger of firms that use the same distribution channels. Conglomerate integration is where a company buys a range of companies producing different products an example is One example of a conglomerate merger was the merger between the Walt Disney Company and the American Broadcasting Company.Finally international integration, which is when global companies buy up other companies worldwide. This type of joint is a good way of entering a new international market.
Business integrate for different reasons, they can do it to get access to a new market, even in other countries. Some firms may also do it to reduce competitors, or to find new ways in which doing advertising cheaper and more efficient. It can also be done, to expand in the market share, or if one of the biggest companies in a market joins to another of the biggest companies. They can also do it to acquire new technologies from other firm, were they my have more and better technologies. Paula Grcia 10N
Year 10 BlogSpot 6 Integration Some firms integrate with others. Explain the different forms of integration and suggest why integration happens.
To integrate means to join together. In business, integration may be in the form of a merger (when two or more firms agree to form a new company together) or a takeover (when one company acquires ownership and control of another company through the purchase of its shares).
There are five different types of ways in which companies integrate together – horizontal, vertical, lateral, conglomerate and international. When firms join at the same stage of production, this type of integration is called Horizontal integration. These companies can each lean from ‘best practice’. The increased size of the business provides economies of scale. Furthermore, vertical integration is a movement in the stages of production. Forward vertical integration would be taking over a firm at an earlier stage of production; whereas, there also is backwards integration which would mean taking over a firm at an earlier stage of production. With this type of integration firms gain control over its supply chain. Also, when there is a merger of firms that use the same distribution channels this type of integration is called lateral integration. This consists of a company selling tea, for example, joining with its competitors (coffee) this type of integration happens so that goods can be distributed together. Moreover, conglomerate integration is where a company buys a range of companies producing different produce. Finally, international integration is where global companies buy up other companies to have presence in those places.
The reasons as to why companies integrate together are so that that they can gain access to new markets, perhaps in other countries. Also, these companies may have new technologies so new firms want to acquire them. Many companies integrate because there is too much supply, relative to the demand, and by integrating they will be able to gain more demand and gain control of the market supply.
Integration is the ability of a firm to join or buy another firm. The first two types of integration are either by a merger or a takeover. A merger occurs when there is an agreement between two companies that combine to form a single company. The shareholders in these companies retain a share in the new business. A takeover occurs when a one business gains control of or buys part of another business, usually without the other companies consent. If the firm that wants to take over the other firm had 50% of the shares plus one share, it has control of the firm and can make all the decisions, and do whatever it wants. There are a few reasons why a company would choose integration, including the fact that integration can bring access to new markets in the world, can mean acquiring new technologies from other firms and dynamic products that possibly the firm didn’t know about, and integration might mean taking over a rival of the firm and therefore control supply in the market of the product that the firm is selling.
There are a few other types of integration. Firstly, there are conglomerate businesses which are made up of a range of companies that produce products that do not have anything to do with each other. Secondly, another type of integration is horizontal integration, where firms join at the same stage of production. Furthermore, a vertical integration is when a firm joins with another firm that is forwards or backwards in the stages of production. Also, there is lateral integration, where a firm joins with another that has the same distribution channel, for example a company that sells tea might join a company selling coffee. Lastly, there is international integration, where global companies buy other companies worldwide to expand their market and enter a new international scale.
A company can grow in two forms: internal and external growth. Integration is a type of external growth. It consists in a company joining or buying another company. Integration can happen in two forms: a Merger is when the joining of the companies are done with agreement, and a Takeover is when a company takes another one by force, without agreement. There are five types of integration: A Conglomerate business is made up of a range of different companies producing different products without any relation. Horizontal is when two companies at the same stage of production join together. Lateral is when two firms join together and they sell products with relationship. Vertical is when a company join with another with a higher stage of production (forward movement) or a lower stage of production (backward movement). International occurs when two companies in a different country join together. Integration happens because of many reasons, for example: a company would apply integration to take a competitor company; to make the company bigger so that sales and profit increases, and as they get bigger, they are more popular; if they are in different countries, to become a multinational; to win other small competing companies; to access to a new market, if they from different markets, and as another result, they can raise more finance because they meet new costumers who would want to invest their money.
Integration is an activity by companies that specialize in bringing different manufacturers products together into a smoothly working system through takeover or merger. There are 5 main types of integration, ways in which companies can merge horizontal, vertical, lateral, conglomerate and international. Firstly horizontal integration is when two or more firms join at the same stage of production. The main benefit is that they can learn from best practice in each company and concentrate on processing activities in the most efficient ways. The increased size of the business provides economies of scale. Secondly Vertical integration is when two or more firms join in different stages of production, forwards or backwards. Forwards would mean taking over a firm on a later stage of production and so Backwards would be taking over a firm in an earlier stage of production. The advantage of this type of integration is that the firm gains control over the supply chain. Thirdly Lateral integration, is when a merger of firms that use same distribution channels. Furthermore we have conglomerate integration which consists of a company buying a range of companies producing different products. They are not integrated in the same industry or produce the same products. The advantage of this type of integration apart from providing economies of scale is that if an industry fails you have other one and you don’t just depend in one. Finally International integration which is when two or more firms which reside in different countries join together creating as the main benefit a multinational.
To integrate is to join together. This can be done by a merger (by agreement) or by a takeover (by buying the other company’s shares). There are five main types of integration, Horizontal; this is to join with a company that is in the same production stage as you are so for example a paint factory would join with another paint factory. Vertical is a type of integration that has two sub-types, Forward Vertical and Backwards vertical this implies the direction of the integration if it is forward in the production stages or backwards. Vertical integration occurs within your same industry but to a company in another production stage, e.g. If you are a factory that makes cars then you could buy a steel company or a car distributor etc. Lateral integration is a bit complicated as it means to join with a company that produces different types of things but, and here is where it gets tricky, you both share a common distributor, this means that thy are more likely to still stock the product you are making after the integration. Conglomerate is very simple it just means joining up with another company that has nothing to do with yours, e.g. A coffee shop and a steel works that are located hundreds of kilometers apart. Last but not least international Integration, the name sort of gives it away but I will explain it anyway, this integration occurs between companies in different countries. Integration may occur for a number of reasons, the main one is to grow and expand but there are many more reasons. Other main reasons is technology, imagine that your competitors have an incredible machine that can double their rate of production so to get that machine you buy them. Another of the main reasons is to acquire dynamic products that sell well so even if you are a plant company you will want to buy a little solar panel that is making millions. Another of the common ones is to control supply for a product so if there is much demand you might put the price up by reducing supply so relatively you will be making more money. This happens most with the international integration but it can also happen in the other integrations, it is to get access to new markets, new markets which do not know of your product and there could be millions waiting for you in that market, this also goes linked with buying to get a brands name, yes the name, a mane that everybody knows what it is and where it came from. By Javier Silva
Integration means to join, in this case to join to another firm. You can join another firm by merger or by takeover. A merger happens when two firms join together to form just one firm and when there is an agreement, in the other hand a takeover is also when two companies join to make one but in this case they join without an agreement. There is various reasons to join with another company, the main ones are the following : to make more money as they reduce competition in some cases, to have access to new markets and became a multinational and to adquire new technologies wich could build up the demand of the product. One of the types of integration is called vertical and this happens when the two companies that join together are at different stages of production it can be forward or backward. Forward is when the company you join is at a later stage of production process and backwards is when you join a company at an earlier stage of production. Another on is called horizonatal, this occurs when companies at the same stage of production join together. Furthermore, lateral integration is when firms of the same distribution channels join of the same product. Also, Conglomerate is when a company joins with other compaies that are not related in any aspect of the product. Finally international, this is companies buy other companies internationaly, not from the same country. This makes the compay have access to a new market.
Well done everyone....great answers! You needed to mention internal and external growth, reasons why firms integrate and explain all the types of integration with examples (wherever possible) for full marks.
Here are your marks:
Cristina: B Excellent answer but you left out international integration?! Internal and external growth?
Carlos: B You could written more about why companies join together(reduce competition etc). Internal and external growth?
Sonia: A An excellent answer.
Marta: B+ Excellent answer but you failed to identify 'forward' and 'backward' vertical integration? Internal and external growth?
Paula: B+ Excellent answer with all points covered.Internal and external growth? More examples.
Sophie: B+ excellent answer with most points well covered. Internal and external growth of firms? More examples
Patricia : B+ Good answer but you explanation of the types of integration needed more examples. Internal and external growth?
Liliana: A- Excellent answer but few examples in your explanation.
Pepe: B+ A good answer but few examples given and you didn't mention internal and external growth of a firm.
Javier A Excellent answer with lots of good examples throughout, well written. Internal and external growth?
Diego: B You didn't give many examples and you didn't mention Internal and external growth. You definitions of integration were not clear enough for a higher mark.
Maggie: B Good answer but you needed to use more examples and give more detail about why firms actually integrate. Internal and external growth?
Andrea: B A good answer but you needed to give more examples and mention internal and external growth.
To integrate means to join together. Business integration may be, in the form of a takeover or a merger. Later on it is divided into different types. A merger occurs when two businesses combine to form a single company and the existing shareholders still keep a part of the shares and join together with an agreement. A takeover is when a business takes control of another one often without any agreement. Integration may be done to gain access to a wider market, even in other countries, to acquire new technology and even to reduce competition.
ReplyDeleteOne type of integration is horizontal, and this occurs when more than one firm, (though normally two) join together at the same stage of production and work in the same industry so they can learn from one another. An example would be if Daimler-Benz and Chrysler joined together. Another type of integration is a vertical one; it can be forward (if the company being bought is at a higher stage or scale of the production process) or backwards (if the company being bought is at an earlier stage of the production process) but it all depends on the stages of production. An example of a backward vertical merger would be if Starbucks bought a coffee farm in china, and forward would be if the actual farm bought Starbucks. The third type would be conglomerate, is when a company buys a range of companies producing different products. They aren’t related internally to any specific type of industry, and this avoids the risk of not selling one type of product as if for example, people stop buying shoes as often, you still have the opportunity of selling the same number of toys and therefore this will help you to back-up any problem in one certain industry. The last type would be the lateral, this is when both the buyer and the bought company have similar products in terms of production but aren´t quite the same; e.g tea and coffee, but in practical terms; they could still sell coffee and tea at the same shop.
Integration is the act of combining or adding parts to make a unified whole. In business integration may be in the form of a takeover or a merger. A merger occurs when 2 business join together by agreement, it is similar to a takeover except that the existing shareholders retain a share in the new business. A takeover occurs when a business gains control of part of another business. Often this is done without agreement. Normally business integrate to increase sales, make more money, improves productivity…
ReplyDeleteThere are 5 main types of integration: Horizontal, Vertical, Lateral, Conglomerate and International integration.
Horizontal integration is when firms join at the same stage of production because the different firms are involved in the same stage of production; horizontal integration allows them to share resources at that level. This can lead to an economy of scale where the bigger the better.
Vertical integration is when 2 companies join and are in different stages of production, there are 2 types. Forward would mean taking a firm at a later stage of production e.g. a business with tea estates taking over a firm that processes tea. Backward would be taking a firm at an earlier stage of production. E.g .A firm that advertises and markets tea taking over a firm that processes tea. As you control 2 businesses at different stages of production you have more control over its supply chain
Lateral integration occurs when there is a merger of firms that use the same distribution channels. E.g. a company selling tea may join to a company selling coffee so that the good can be distributed together to supermarket chains
Conglomerate integration is a process whereby a business acquires a substantial number of other unrelated businesses in order to form a large and highly diversified corporation. A very big advantage is diversification, where by acquiring firms in different markets, businesses are able to diversify away their risks.
Finally international integration is when other companies buy other companies worldwide, this integration is a good way of entering to a new international market
Firms can grow big by internal or external growth. Integration is an external growth. This comes form the ability of the firm to join or buy another firm, it really means to join together, and in a business this can be done by a takeover or a merger.
ReplyDeleteA takeover is when a business gains control over part of another business. This is done without an agreement, and can result in the business being broken down, and having parts of it being sold of. A merger, is when to business join together by an agreement. Two business join to form a simple company.
There are five types of integration. It can be horizontal, vertical, lateral, conglomerate or international.
When companies of the same stage of production join, this is called horizontal integration. They can learn from each other, and can concentrate on processing activities in the most efficient plants. Increasing the size of business, can provide economies of scales. Another type of integration is vertical integration. This is when companies of the same stage of production join. It can be forward (taking over a firm in a later stage of production), or backward(taking over a firm at an earlier stage of production). An advantage for this type of integration, is that they can gain control over the supply chain. There is also later integration. This is when firms of the same distribution channels join. An example would be, a company selling Tea joining with a company selling Coffee. When a company integrates with another company producing a different good, this is called conglomerate integration. Profits form already established business can be use to develop a new business area. Also, if for example a certain product’s demand decreases, the company would still be making profits, cause it has other product and areas in which to relay. Lastly there is international integration, this is when global companies such as Tata Tea, buy other companies worldwide. This type of integration is a good way of entering a new international market.
Business integrate for many reasons, they can do it to get access to a new market, even in other countries. They can also do it to acquire new technologies from other firm, were they my have more and better technologies. Some firms may also do it to reduce competitors, or to find new ways in which doing advertising cheaper and more efficient. Sometimes there is to much supply in the market and by buying a company in your same stage of production, it can be reduced. It can also be done to acquire dynamic products, to expand in the market share, or if one of the biggest companies in a market joins to another of the biggest companies, it can be done to monopolise the market.
Integration is to join together, it can take place either through a merger, when there is an agreement between the companies, or through a take over when a business takes control of another business by buying it.
ReplyDeleteThere are five different types of integration. There is horizontal integration, when companies which are in the same stage of production join, which could provide economies of scale.
There is also vertical integration, which is a join between companies which can be in a earlier stage of production or in a later stage of production. An advantage of this type of integration is that the firm gains control over its supply chain.
However another typical type of integration is the lateral integration, when there is a merger of firms that use the same distribution channels, for example a company selling coffee mergers with a company tea, so that goods can be distributed together to supermarket chais.
Furthermore, a type of integration that many big companies, such as multinationals adopt is to become conglomerate, where a company buys a range of companies producing different products that are not related.
Finally the last type of integration is to become international, where global companies buy up other companies worldwide, this type of integration is a good way of entering a new international market.
But, WHY DO COMPANIES INTEGRATE?
Many companies integrate because there is too much supply, relative to the demand, and by integrating they will be able to gain more demand and gain control of the market supply. another reason for why companies may integrate is to access new markets in other countries, for example if a British company buys a chinese company, it will gain part of the chinese market and therefore profits. Moreover an important reason for why a company may integrate is to acquire new technologies and become more competitive. Lastly, they may integrate to acquire more dynamic products and be able to get and increase in demand.
To integrate means to join together. In business integration may be in the form of a takeover or a merger.
ReplyDeleteA merger occurs when two businesses combine to form a single company. The existing shareholders retain a share in the new business, it is a join together by agreement.
A takeover occurs when one business gains control or buys part of another business. It is often done without agreement.
There are 5 main types of integration ways in which companies can merge, one is horizontal integration, it is where firms join at the same stage of production . they can learn from best practice in each company and concentrate on processing activities in the most efficient plants. This increased size of the business provides economies of scale.
Secondly vertical integration, this can a forward or a backward movement in the stage of production, forward would mean taking over a firm at a later stage in the production process. Backward would be taking over a form at an earlier stage of production. This short of integration is that the firm gains control over its supply chain. Starbucks is an example of vertical integration. Furthermore, another type of integration is lateral , occurs when there is a merger of firms that use the same distribution channels. Conglomerate integration is where a company buys a range of companies producing different products an example is One example of a conglomerate merger was the merger between the Walt Disney Company and the American Broadcasting Company.Finally international integration, which is when global companies buy up other companies worldwide. This type of joint is a good way of entering a new international market.
Business integrate for different reasons, they can do it to get access to a new market, even in other countries. Some firms may also do it to reduce competitors, or to find new ways in which doing advertising cheaper and more efficient. It can also be done, to expand in the market share, or if one of the biggest companies in a market joins to another of the biggest companies. They can also do it to acquire new technologies from other firm, were they my have more and better technologies.
Paula Grcia 10N
Year 10 BlogSpot 6 Integration
ReplyDeleteSome firms integrate with others. Explain the different forms of integration and suggest why integration happens.
To integrate means to join together. In business, integration may be in the form of a merger (when two or more firms agree to form a new company together) or a takeover (when one company acquires ownership and control of another company through the purchase of its shares).
There are five different types of ways in which companies integrate together – horizontal, vertical, lateral, conglomerate and international.
When firms join at the same stage of production, this type of integration is called Horizontal integration. These companies can each lean from ‘best practice’. The increased size of the business provides economies of scale. Furthermore, vertical integration is a movement in the stages of production. Forward vertical integration would be taking over a firm at an earlier stage of production; whereas, there also is backwards integration which would mean taking over a firm at an earlier stage of production. With this type of integration firms gain control over its supply chain. Also, when there is a merger of firms that use the same distribution channels this type of integration is called lateral integration. This consists of a company selling tea, for example, joining with its competitors (coffee) this type of integration happens so that goods can be distributed together. Moreover, conglomerate integration is where a company buys a range of companies producing different produce. Finally, international integration is where global companies buy up other companies to have presence in those places.
The reasons as to why companies integrate together are so that that they can gain access to new markets, perhaps in other countries. Also, these companies may have new technologies so new firms want to acquire them. Many companies integrate because there is too much supply, relative to the demand, and by integrating they will be able to gain more demand and gain control of the market supply.
Integration is the ability of a firm to join or buy another firm. The first two types of integration are either by a merger or a takeover. A merger occurs when there is an agreement between two companies that combine to form a single company. The shareholders in these companies retain a share in the new business. A takeover occurs when a one business gains control of or buys part of another business, usually without the other companies consent. If the firm that wants to take over the other firm had 50% of the shares plus one share, it has control of the firm and can make all the decisions, and do whatever it wants. There are a few reasons why a company would choose integration, including the fact that integration can bring access to new markets in the world, can mean acquiring new technologies from other firms and dynamic products that possibly the firm didn’t know about, and integration might mean taking over a rival of the firm and therefore control supply in the market of the product that the firm is selling.
ReplyDeleteThere are a few other types of integration. Firstly, there are conglomerate businesses which are made up of a range of companies that produce products that do not have anything to do with each other. Secondly, another type of integration is horizontal integration, where firms join at the same stage of production. Furthermore, a vertical integration is when a firm joins with another firm that is forwards or backwards in the stages of production. Also, there is lateral integration, where a firm joins with another that has the same distribution channel, for example a company that sells tea might join a company selling coffee. Lastly, there is international integration, where global companies buy other companies worldwide to expand their market and enter a new international scale.
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ReplyDeleteA company can grow in two forms: internal and external growth. Integration is a type of external growth. It consists in a company joining or buying another company.
ReplyDeleteIntegration can happen in two forms: a Merger is when the joining of the companies are done with agreement, and a Takeover is when a company takes another one by force, without agreement.
There are five types of integration: A Conglomerate business is made up of a range of different companies producing different products without any relation. Horizontal is when two companies at the same stage of production join together. Lateral is when two firms join together and they sell products with relationship. Vertical is when a company join with another with a higher stage of production (forward movement) or a lower stage of production (backward movement). International occurs when two companies in a different country join together.
Integration happens because of many reasons, for example: a company would apply integration to take a competitor company; to make the company bigger so that sales and profit increases, and as they get bigger, they are more popular; if they are in different countries, to become a multinational; to win other small competing companies; to access to a new market, if they from different markets, and as another result, they can raise more finance because they meet new costumers who would want to invest their money.
Integration is an activity by companies that specialize in bringing different manufacturers products together into a smoothly working system through takeover or merger. There are 5 main types of integration, ways in which companies can merge horizontal, vertical, lateral, conglomerate and international. Firstly horizontal integration is when two or more firms join at the same stage of production. The main benefit is that they can learn from best practice in each company and concentrate on processing activities in the most efficient ways. The increased size of the business provides economies of scale. Secondly Vertical integration is when two or more firms join in different stages of production, forwards or backwards. Forwards would mean taking over a firm on a later stage of production and so Backwards would be taking over a firm in an earlier stage of production. The advantage of this type of integration is that the firm gains control over the supply chain. Thirdly Lateral integration, is when a merger of firms that use same distribution channels. Furthermore we have conglomerate integration which consists of a company buying a range of companies producing different products. They are not integrated in the same industry or produce the same products. The advantage of this type of integration apart from providing economies of scale is that if an industry fails you have other one and you don’t just depend in one. Finally International integration which is when two or more firms which reside in different countries join together creating as the main benefit a multinational.
ReplyDeleteTo integrate is to join together. This can be done by a merger (by agreement) or by a takeover (by buying the other company’s shares). There are five main types of integration, Horizontal; this is to join with a company that is in the same production stage as you are so for example a paint factory would join with another paint factory. Vertical is a type of integration that has two sub-types, Forward Vertical and Backwards vertical this implies the direction of the integration if it is forward in the production stages or backwards. Vertical integration occurs within your same industry but to a company in another production stage, e.g. If you are a factory that makes cars then you could buy a steel company or a car distributor etc. Lateral integration is a bit complicated as it means to join with a company that produces different types of things but, and here is where it gets tricky, you both share a common distributor, this means that thy are more likely to still stock the product you are making after the integration. Conglomerate is very simple it just means joining up with another company that has nothing to do with yours, e.g. A coffee shop and a steel works that are located hundreds of kilometers apart. Last but not least international Integration, the name sort of gives it away but I will explain it anyway, this integration occurs between companies in different countries. Integration may occur for a number of reasons, the main one is to grow and expand but there are many more reasons. Other main reasons is technology, imagine that your competitors have an incredible machine that can double their rate of production so to get that machine you buy them. Another of the main reasons is to acquire dynamic products that sell well so even if you are a plant company you will want to buy a little solar panel that is making millions. Another of the common ones is to control supply for a product so if there is much demand you might put the price up by reducing supply so relatively you will be making more money. This happens most with the international integration but it can also happen in the other integrations, it is to get access to new markets, new markets which do not know of your product and there could be millions waiting for you in that market, this also goes linked with buying to get a brands name, yes the name, a mane that everybody knows what it is and where it came from.
ReplyDeleteBy Javier Silva
Integration means to join, in this case to join to another firm. You can join another firm by merger or by takeover. A merger happens when two firms join together to form just one firm and when there is an agreement, in the other hand a takeover is also when two companies join to make one but in this case they join without an agreement. There is various reasons to join with another company, the main ones are the following : to make more money as they reduce competition in some cases, to have access to new markets and became a multinational and to adquire new technologies wich could build up the demand of the product.
ReplyDeleteOne of the types of integration is called vertical and this happens when the two companies that join together are at different stages of production it can be forward or backward. Forward is when the company you join is at a later stage of production process and backwards is when you join a company at an earlier stage of production.
Another on is called horizonatal, this occurs when companies at the same stage of production join together.
Furthermore, lateral integration is when firms of the same distribution channels join of the same product.
Also, Conglomerate is when a company joins with other compaies that are not related in any aspect of the product.
Finally international, this is companies buy other companies internationaly, not from the same country. This makes the compay have access to a new market.
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ReplyDeleteWell done everyone....great answers!
ReplyDeleteYou needed to mention internal and external growth, reasons why firms integrate and explain all the types of integration with examples (wherever possible) for full marks.
Here are your marks:
Cristina: B
Excellent answer but you left out international integration?! Internal and external growth?
Carlos: B
You could written more about why companies join together(reduce competition etc). Internal and external growth?
Sonia: A
An excellent answer.
Marta: B+
Excellent answer but you failed to identify 'forward' and 'backward' vertical integration? Internal and external growth?
Paula: B+
Excellent answer with all points covered.Internal and external growth? More examples.
Sophie: B+
excellent answer with most points well covered. Internal and external growth of firms? More examples
Patricia : B+
Good answer but you explanation of the types of integration needed more examples. Internal and external growth?
Liliana: A-
Excellent answer but few examples in your explanation.
Pepe: B+
A good answer but few examples given and you didn't mention internal and external growth of a firm.
Javier A
Excellent answer with lots of good examples throughout, well written. Internal and external growth?
Diego: B
You didn't give many examples and you didn't mention Internal and external growth. You definitions of integration were not clear enough for a higher mark.
Maggie: B
Good answer but you needed to use more examples and give more detail about why firms actually integrate. Internal and external growth?
Andrea: B
A good answer but you needed to give more examples and mention internal and external growth.