Publisher: Leni
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After mentioning 5 types of strategies expansion in the first part, which is expansion through concentration, expansion through diversification, expansion through integration, expansion through cooperation and expansion through internationalization, we will talk and discuss the other three types of them in this section below.
The third type of strategy of expansion is expansion through integration. What is expansion through integration? This type of expansion strategy will combine from one or two kinds of operations through the value chain. This means that the business organizer will match the activities by the raw materials to the needs of existing customers. This integration will broaden into vertical or horizontal integration. The vertical type comprises forward and backward. Vertical integration will make business practitioners accommodate the sales of the products from the product in the manufacturing place to the retail outlet. The business organizations will provide the raw products. For example, one shoe company manufacturer has their own shoe material like leather.While Horizontal integration is a kind of a similar product with snake type of marketing production where one of the pharmacy companies takes the rival pharma to the same level.
The following strategy of expansion is expansion through cooperation. The expansion through cooperation is the strategy that business owners make in mutual agreement with their competitor to compete. There are four things in these strategies that come in. First by takeovers, second by the merger, third by joint ventures, and last by strategic alliance. The first type is a merger where this way used to combine two or more firms come into existence into new firms. All the assets were combine together and formed into new ones. Takeover strategy is a part of expansion which one firm try to gain another firms operations. The following type is joint venture where the firms that join agree to take the business together but in short period. The last type is strategic alliance where the business organization aligns together in cooperation and has function independently.
The last type of strategy expansion is internationalization. This strategy will bring business life out of national boundaries. The products will promote to another country. Many of products skincare where bring to expand another countries. This type consist of four strategies: first is global strategy, second is transnational strategy, third international strategy and the last on is multi domestic strategies. The global strategy will bring a low cost basis where the products or services has their one standar offered in the those specific target countries. The international strategy will adapt from foreign market with some restrict control on the business operations. Another type is multi domestic strategy where accommodations will match wil local markets depend on those target countries. The transnational strategies combine between multi domestic and global strategy. Depend on low cost provide.
It better for us as business practitioner to choose the best practices for our business model. Which one of those strategies we will implement with team member. Remember to take the business goals to expand depend of our specific target.