Vertical Integration

Question 1

At which part of the Strategic Management Process does Vertical Integration decisions take place?

Answer 1

Strategic choice - Corporate Level

Decide which businesses to enter and vertically integrate

Question 2

In Ansoff’s Matrix, what is it called when a new market is entered with a new product?

Answer 2

Conglomerate Diversification

Question 3

In Ansoff’s Matrix, what is Market Penetration?

Answer 3

An existing market and existing product. Increasing market share with the current product range.
Such as Apple making another iPhone

Question 4

In Ansoff’s Matrix, what is Market Development?

Answer 4

New market but an existing product, such as Nike selling in a new geographical location

Question 5

Name an example of Conglomerate Diversification

Answer 5

Amazon from selling books to selling groceries

Question 6

In Ansoff’s Matrix, what is it called when a new product is entered into an existing market and name an example

Answer 6

New product and services / product development.
Apple selling smart watched or TVs
Netflix originally rented DVDs and is now a streaming service

Question 7

What is Consolidation?

Answer 7

When an organisation focuses defensively on their current market with current products

Question 8

What is Retrenchment?

Answer 8

A strategy of withdrawal from marginal activities in order to concentrate on the most valuable segments and products

Question 9

What is Corporate Strategy and what are the dimensions of the scope?

Answer 9

It is concerned with where a firm competes

• Vertical scope
• Geographical scope
• Product scope

Question 10

What are the 3 types of Vertical Integration?

Answer 10

Full integration - all stages
Partial Integration - selected stages
Tapered Integration - mix of in-house and outsource at any stage