Linkages Flashcards
overview
Developing links with other countries and between countries
Links can be made by investing in them and by establishing joint ventures
Expansion can also be achieved through takeovers or mergers with other companies to integrate different parts of the business
2 types of integration
Vertical integration
The supply chain of a company is owned entirely by that company from raw material through to the finished product
Gives TNC’s control over supplies and stocks an dresses costs
EG BP, has negotiated exploration and production rights in over 50 oil and gas fields worldwide
Owns 11 oil pipelines and refineries
Horizontal integration
Company diversifies operations by expansion, merger or takeover to give broader capability at production
EG Kraft Foods takeover of Cadbury gave them a more diverse base in grocery and confectionery market
