Strategic Advantages of Backward Integration

Essay specific features

 

Issue:

Business

 

Written by:

Roberta G

 

Date added:

September 21, 2011

 

Level:

University

 

Grade:

A

 

No of pages / words:

2 / 488

 

Was viewed:

3857 times

 

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Essay content:

De-Integration ? Whether vertical integration is a viable strategic option depends on its ? Ability to lower cost, build expertise, increase differentiation, or enhance performance of strategy-critical activities ? Impact on investment cost, flexibility, and administrative overhead ? Contribution to enhancing a firm's competitiveness Many companies are finding that de-integrating value chain activities is a more flexible, economic strategic option! Outsourcing Strategies ? Concept: ? Outsourcing involves withdrawing from certain value chain activities and relying on outsiders to supply needed products, support services, or functional activities When Does Outsourcing Make Strategic Sense? ? Activity can be performed better or more cheaply by outside specialists ? Activity is not crucial to achieve a sustainable competitive advantage ? Risk exposure to changing technology and/or changing buyer preferences is reduced ? Operations are streamlined to ? Cut cycle time ? Speed decision-making ? Reduce coordination costs ? Firm can concentrate on "core" value chain activities that best suit its resource strengths Strategic Advantages of Outsourcing ? Improves firm's ability to obtain high quality and/or cheaper components or services ? Improves firm's ability to innovate by interacting with "best-in-world" suppliers ? Enhances firm's flexibility should customer needs and market conditions suddenly shift ? Increases firm's ability to assemble diverse kinds of expertise speedily and efficiently ? Allows firm to concentrate its resources on performing those activities internally which it can perform better than outsiders Pitfalls of Outsourcing ? Farming out too many or the wrong activities, thus ? Hollowing out capabilities ? Losing touch with activities and expertise that determine overall longterm success
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De-Integration ? Whether vertical integration is a viable strategic option depends on its ? Ability to lower cost, build expertise, increase differentiation, or enhance performance of strategy-critical activities ? Impact on investment cost, flexibility, and administrative overhead ? Contribution to enhancing a firm's competitiveness Many companies are finding that de-integrating value chain activities is a more flexible, economic strategic option! Outsourcing Strategies ? Concept: ? Outsourcing involves withdrawing from certain value chain activities and relying on outsiders to supply needed products, support services, or functional activities When Does Outsourcing Make Strategic Sense? ? Activity can be performed better or more cheaply by outside specialists ? Activity is not crucial to achieve a sustainable competitive advantage ? Risk exposure to changing technology and/or changing buyer preferences is reduced ? Operations are streamlined to ? Cut cycle time ? Speed decision-making ? Reduce coordination costs ? Firm can concentrate on "core" value chain activities that best suit its resource strengths Strategic Advantages of Outsourcing ? Improves firm's ability to obtain high quality and/or cheaper components or services ? Improves firm's ability to innovate by interacting with "best-in-world" suppliers ? Enhances firm's flexibility should customer needs and market conditions suddenly shift ? Increases firm's ability to assemble diverse kinds of expertise speedily and efficiently ? Allows firm to concentrate its resources on performing those activities internally which it can perform better than outsiders Pitfalls of Outsourcing ? Farming out too many or the wrong activities, thus ? Hollowing out capabilities ? Losing touch with activities and expertise that determine overall longterm success
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General issues of this essay:
Analysis of Marketing Activities and Strategies of Play TV Determine The Primary Activities And Secondary Activities Of Your Organisation. Make A Conscious Decision On Whether Your Organization Should Compete By The Least Cost Strategy Or The Product Differentiation Strategy. Determine The Cost Drivers Of... HRM activities Strategic Advantages of Backward Integration To What Extent Can Decisions About Operations Really Be Strategic From The Firm’S Point Of View? Trace The Development Of Strategic Human Resource Management From The Resource Based View Of The Firm. How Does The Resource Based View Of The Firm Facilitate And Inhibit The Actual Practice Of Strategic Human Resource Management. Trace The Development Of Strategic Human Resource Management From The Resource Based View Of The Firm. How Does The Resource Based View Of The Firm Facilitate And Inhibit The Actual Practice Of Strategic Human Resource Management. What is the relevance of the research-based view of the firm to strategic management in a global environment? Effects of Economic Activities on the Environment The Effect Of Formal Strategic Planning On Firm Performance And Job Satisfaction Value Aligning Activities To Obtain Increase In Sales And Productivity Core Elements of Health Education and Risk Reduction Activities Evaluating How Networks Impact On The Innovative Activity Of The Firm In The Context Of The European Framework Programmes “informatio Technology Can’t Really Give A Company A Strategic Advantage, Because Most Competitive Advantages Don’t Last More Then A Few Years And Soon Become Strategic Necessities Which Just Raise The Stakes Of The Game. Discuss Why? Critical appraisal of Amazon.com current e-business strategy and activities.
 

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